Universal Service Obligation, 23507-23516 [E8-9464]
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Federal Register / Vol. 73, No. 84 / Wednesday, April 30, 2008 / Notices
Dated: April 24, 2008.
Charles E. Brooks,
Chairman, Federal Prevailing Rate Advisory
Committee.
[FR Doc. E8–9508 Filed 4–29–08; 8:45 am]
BILLING CODE 6325–49–P
POSTAL REGULATORY COMMISSION
[Docket No. PI2008–3; Order No. 71]
Universal Service Obligation
Postal Regulatory Commission.
Notice.
AGENCY:
ACTION:
SUMMARY: A recent law requires the
Commission to submit to Congress, by
late December 2008, a report on the
universal service obligation. This notice
informs the public of the Commission’s
obligation to prepare the report,
provides background information, and
seeks comments from the public.
DATES: Initial comments due June 30,
2008; reply comments due July 29,
2008. See SUPPLEMENTARY INFORMATION
section for field hearing dates.
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:
I. Introduction
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Section 702 of the Postal
Accountability and Enhancement Act,
Public Law 109–435 (PAEA) requires
the Postal Regulatory Commission (PRC
or Commission) to submit a report to the
President and Congress on ‘‘universal
postal service and the postal monopoly
in the United States * * * including the
monopoly on the delivery of mail and
on access to mailboxes.’’ The report is
to be submitted not later than December
19, 2008.1
In preparing its report, the PRC is
required by section 702(c) to ‘‘consult
with the Postal Service and other
Federal agencies, users of the mails,
enterprises in the private sector engaged
in the delivery of the mail, and the
general public[.]’’ Section 702(c)
provides further that the Commission
1 Section 702 of the PAEA requires that the report
be submitted ‘‘[n]ot later than 24 months after the
date of enactment * * * .’’ The PAEA was enacted
on December 20, 2006. Since the final day of the
24-month period for completing and submitting the
report falls on a Saturday and since the PAEA does
not provide for an extension to the next business
day, the report must be submitted not later than
December 19, 2008.
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shall address in its report any written
comments that it receives.
As part of its effort to fulfill these
obligations, the Commission is initiating
this docket to solicit comments on
universal postal service and the postal
monopoly. This notice also includes a
Discussion Memorandum intended to
provide background information and to
present questions intended to elicit data
and views that will assist the
Commission in preparing its report.2
The views set forth in the Discussion
Memorandum do not necessarily reflect
the opinions or positions of the
Commission or any individual
Commissioner. They are provided solely
for the purpose of stimulating
discussion of relevant subjects and of
providing an organizational framework
for obtaining comments and
suggestions.
While commenters are free to organize
their submissions in any manner they
choose, it will facilitate analysis by the
Commission and by other commenters if
submissions follow the suggested topic
outline in this notice and the Discussion
Memorandum as much as possible.
Commenters should, of course, feel free
to address only such portions of the
topic outline, and only the specific
questions, they wish.
This notice also includes a brief guide
to sources of information that may be of
use to commenters in preparing their
submissions. Commenters are
encouraged to use additional reference
materials. The Commission requests
that, if possible, reference materials not
available from the Internet or readily
available electronic databases (such as
Westlaw, Lexis-Nexis, the Library of
Congress, the Government Printing
Office, and Journal Storage) be provided
in a searchable pdf format.
Initial comments are due 60 days after
publication of this notice in the Federal
Register. Reply comments are due 90
days after publication of this notice in
the Federal Register. All comments and
suggestions received will be available
for review on the Commission’s Web
site at https://www.prc.gov.
In addition to this solicitation of
comments, the Commission intends to
hold several public hearings at locations
outside of Washington, DC in order to
obtain further information. The dates
and locations for those hearings are as
follows: May 21, 2008 (2 p.m.), Flagstaff
City Hall, 211 West Aspen Avenue,
Flagstaff, AZ 86001; June 5, 2008 (10
a.m.), City Hall/Court House Building,
2 See section IV. Discussion Memorandum For
Use In Preparing Comments On Universal Postal
Service and the Postal Monopoly Laws (Discussion
Memorandum).
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City Council Chambers, 3rd Floor, 15
Kellogg Boulevard, St. Paul, MN 55102;
and June 19, 2008 (2 p.m.), City Hall, 1
Junkins Avenue, Portsmouth, NH 03801.
Additionally, the Commission intends
to sponsor an open workshop in
Washington, DC during May 2008 to
receive public comment.
Further details on the field hearings
and other steps to be taken in this
docket will be posted on the
Commission’s Web site at https://
www.prc.gov.
II. Required Contents of the
Commission’s Report
Section 702(a)(2) of the PAEA
requires that the following subjects be
included in the Commission’s report:
1. A comprehensive review of the
history and development of universal
service and the postal monopoly,
including how the scope and standards
of universal service and the postal
monopoly have evolved over time for
the nation and its urban and rural areas;
2. The scope and standards of
universal service and the postal
monopoly provided under current law
* * *, and current rules, regulations,
policy statements, and practices of the
Postal Service;
3. A description of any geographic
areas, populations, communities
(including both urban and rural
communities), organizations, or other
groups or entities not currently covered
by universal service or that are covered
but that are receiving services deficient
in scope or quality or both; and
4. The scope and standards of
universal service and the postal
monopoly likely to be required in the
future in order to meet the needs and
expectations of the . . . public, including
all types of mail users, based on
discussion of such assumptions,
alternative sets of assumptions, and
analyses as the Postal Service considers
plausible.
PAEA section 702(b) provides further
that if the Commission decides to
recommend any changes to universal
service and the postal monopoly
(whether those changes could be made
under current law or would require
changes in current law), then the
Commission must provide estimated
effects of each recommendation on the
service, financial condition, rates, and
security of mail provided by the Postal
Service. Finally, with respect to each
recommendation concerning the
universal service obligation or postal
monopoly made in the reports required
by PAEA sections 701 and 702, the
Commission is required to include:
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1. An estimate of the costs * * *
attributable to the obligation to provide
universal service under current law;
2. An analysis of the likely benefit of
the current postal monopoly to the
ability of the Postal Service to sustain
the current scope and standards of
universal service, including estimates of
the financial benefit of the postal
monopoly to the extent practicable,
under current law; and
3. Any additional topics and
recommendations the Commission
deems appropriate, together with
estimated effects on service, financial
condition, rates, and the security of
mail.
III. Issues for Comment
‘‘Universal postal service’’ is the term
commonly used to refer to postal service
to all parts of the country. See United
States Postal Serv. v. Flamingo Indus.
(USA) Ltd., 540 U.S. 736 at 741 (2004)
(citing 39 U.S.C. 101, 403). The Postal
Service’s obligation to provide such
‘‘universal service’’ is often referred to
as the universal service obligation
(USO). Although the USO lacks an
express statutory definition, it often is
thought of as an obligation with
characteristics or features such as: (1)
Geographic scope; (2) range of product
offerings; (3) access to postal facilities
and services; (4) frequency of delivery;
(5) rates and affordability; and (6)
quality of service. A USO is generally
supported by granting exclusive rights
to the postal administration to provide
selected services—i.e., a postal
monopoly. A number of countries,
mostly in Europe, have begun to reduce
or eliminate the postal monopoly over
the past 10 years, while at the same time
taking care to ensure some minimum
level of service to each citizen. It is
against this background that the United
States Congress mandated the
Commission’s report.
The Commission solicits comments
from interested persons, including other
Federal agencies, users of the mails,
enterprises in the private sector engaged
in the delivery of the mail, and the
general public, on any or all aspects of
the subjects to be included in the
Commission’s report and any additional
topics and recommendations. Topics
and specific questions that persons may
wish to address include, but are not
limited to, the following:
Topic No. 1—scope of ‘‘universal
postal service’’ and ‘‘universal service
obligation.’’ Section 702(a)(2)(B) of the
PAEA requires the Commission to
include in its report ‘‘the scope and
standards of universal service and the
postal monopoly provided under
current law (including sections 101 and
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403 of title 39, United States Code), and
current rules, regulations, policy
statements, and practices of the Postal
Service.’’ Thus, one of the Commission’s
fundamental tasks in preparing its
report will be to define the concept of
‘‘universal postal service’’—or, more
simply, ‘‘universal service.’’ The
essential problem is that the term
‘‘universal service’’ is undefined in U.S.
postal laws. In other industrialized
countries that have addressed postal
reform, the concept of universal postal
service is linked to a second, closely
related concept, that of a ‘‘universal
service obligation’’ or USO. The USO is
thus a legal obligation whereas
‘‘universal postal service’’ is a set of
postal services. While title 39 includes
standards that relate to the concept of
‘‘universal service,’’ neither title 39, nor
other Federal statutes, define ‘‘universal
service obligation.’’
In the absence of explicit statutory
definitions, do the six factors listed
above (i.e., geographic scope, range of
product offerings, access to facilities
and services, frequency of delivery,
rates and affordability, and quality of
services) adequately set forth the
parameters of universal service and a
universal service obligation? If not, what
factors should, or legally must, be
considered? In addressing these issues,
commenters should consider the
information in the Discussion
Memorandum. Additional questions
related to this topic also can be found
in the Discussion Memorandum.
Topic No. 2—historical development
of universal service, the USO and
monopoly laws. Section 702(a)(2)(A) of
the PAEA requires the Commission’s
report to include ‘‘a comprehensive
review of the history and development
of universal service and the postal
monopoly, including how the scope and
standards of universal service and the
postal monopoly have evolved over time
for the Nation and its urban and rural
areas * * * .’’ Specific questions related
to this topic can be found in the
Discussion Memorandum.
Topic No. 3—universal service:
geographic scope. Section 702(a)(2)(C)
of the PAEA requires the report to
include ‘‘a description of any
geographic areas, populations,
communities (including both urban and
rural communities), organizations, or
other groups or entities not currently
covered by universal service or that are
covered but that are receiving services
deficient in scope or quality or both.’’
Specific questions related to this topic
can be found in the Discussion
Memorandum.
Topic No. 4—universal service: range
of product offerings. Commenters are
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invited to comment on their anticipated
needs and expectations with respect to
the range of products that should be
included in the concept of universal
service. Commenters may wish to
discuss their needs and expectations, as
well as the needs and expectations of
others—for example, all companies in
the same sector or society generally. In
providing their views, it would be
helpful if commenters could provide
general, non-confidential information
on their current use of postal services,
describing, if possible, current use by
subclass, shape, and weight. In
particular, it would be helpful if
associations representing industrial
sectors could provide estimates of the
current use of universal services by their
sectors and a summary of the needs and
expectations of the sector for universal
services in the future. Questions related
to this topic can be found in the
Discussion Memorandum.
Topic No. 5—universal service: access
to postal facilities and services.
Commenters are invited to express their
views on the need for access to post
offices, the types of services that require
access to post office facilities, the
adequacy of existing post office
facilities, and the adequacy of
substituting contract post offices or
other types of retail outlets for Postal
Service post offices. In this connection,
commenters may also wish to address
the mailbox monopoly and its
relationship with universal service and
the universal service obligation. Specific
questions related to this topic can be
found in the Discussion Memorandum.
Topic No. 6—universal service:
frequency of delivery. In most parts of
the United States, mail is delivered six
days a week.3 Exceptions include
delivery in certain remote areas in
places such as Alaska where deliveries
are less frequent. In other areas,
deliveries of Express Mail are, for
example, made seven days a week.
Commenters may wish to address the
question of what level of frequency is
appropriate for universal services.
Specific questions related to this topic
can be found in the Discussion
Memorandum.
Topic No. 7—universal service
obligation: rates and affordability of
service. The rates for universal services
are of importance to both the Postal
Service and the customers who rely
upon those services. Rate levels play a
critical role in determining what
services are offered and the affordability
of those services. Specific questions
3 Congress has, for a number of years, included a
requirement of six-day-a-week delivery in various
appropriation bills.
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related to the issue of rates and
affordability of service can be found in
the Discussion Memorandum.
Topic No. 8—universal service:
quality of service. Prior to the PAEA, the
services of the Postal Service were not
subject to service standards that defined
the percentage of items that must be
delivered within specified periods after
posting. Although the PAEA required
the Postal Service to adopt such service
standards, these standards are not the
same as an externally defined USO
requirement because they are devised by
the Postal Service and subject to
revision by the Postal Service. On the
other hand, the PAEA did, for the first
time, require the Postal Service to
introduce external measurement of
performance under these service
standards (or an internal measurement
approved by the Commission). In the
European Union (EU), the regulator is
typically required to both (1) establish
quality of service standards, and (2)
ensure independent monitoring of
performance. Specific questions related
to this topic can be found in the
Discussion Memorandum.
Topic No. 9—methods of calculating
the cost of the universal service
obligation and postal and mailbox
monopolies. The PAEA and
implementing regulations issued by the
Commission introduced a modern
system of rate regulation. Under the
PAEA, the Commission is not scheduled
to conduct an overall review of the
modern system of regulation insofar as
it applies to market dominant products
until 2016. 39 U.S.C. 3622(d)(3).
Nonetheless, a revision of the USO and/
or monopoly laws could imply
modifications to recently adopted
procedures for regulation of rates.
Commenters are invited to provide any
views and analyses with respect to such
economic relationships. Specific
questions related to this topic can be
found in the Discussion Memorandum.
Topic No. 10—the implications of the
universal service obligation for the
postal monopoly. Section 702(a)(2)(D) of
the PAEA requires the Commission’s
report to include ‘‘the scope and
standards of universal service and the
postal monopoly likely to be required in
the future in order to meet the needs
and expectations of the * * * public
* * * .’’ In addition, section 702(b)
requires the Commission to provide the
estimated effects of any recommended
changes to universal service and the
postal monopoly, as well as an analysis
of the likely benefit of the current postal
monopoly to the Postal Service to
sustain the current scope and standards
of universal service.
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Previous topics identified in this
notice have focused on the implications
of the postal monopoly and mailbox
monopoly for the universal service
obligation.4 This topic focuses on the
implications of the universal service
obligation for the postal and mailbox
monopolies. In addressing this topic,
commenters should discuss how their
conception of the universal service
obligation would affect the need for, and
parameters of, the postal monopoly and
mailbox monopoly. Specific questions
related to this topic can be found in the
Discussion Memorandum.
Topic No. 11—universal service, the
universal service obligation and the
postal monopoly in other countries.
Commenters are invited to provide any
views and analyses of the evolution of
universal service, the USO, and the
postal monopoly in other industrialized
countries and to comment upon the
possible relevance, or lack of relevance,
of such examples for the current study.
Specific questions related to this topic
can be found in the Discussion
Memorandum.
Topic No. 12–other issues.
Commenters are invited to provide any
views and analyses on subjects not
covered by the preceding topic
headings, including, for example, views
and/or analyses on broader social,
economic, and technological trends that
may affect the future needs and
expectations of society generally with
respect to universal service in 3 years,
5 years, 10 years, and 15 years. Specific
questions related to this topic can be
found in the Discussion Memorandum.
Commenters are reminded that if the
Commission recommends any changes
to universal service and the postal
monopoly, the Commission must
provide estimated effects of each
recommendation on the service,
financial condition, rates, and security
of mail provided by the Postal Service.
Those recommending changes would
assist the Commission if they also
provide information on these effects.
IV. Sources of Information
This section provides a brief guide to
sources of additional information about
4 See Topic No. 2 (the history, development, and
evolution of the universal service obligation and the
postal monopoly); Topic No. 4 (the effect of the
postal monopoly on the range of universal service
product offerings); Topic No. 5 (the role of the
mailbox monopoly in supporting universal service
and the universal service obligation); Topic No. 6
(the implication of the postal monopoly for the
frequency of delivery of universal services); Topic
No. 7 (the relationship between the monopoly laws
and rates for universal service); and Topic No. 9
(the relationship between benefits and costs of the
postal monopoly, the mailbox monopoly, and the
universal service obligation).
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universal postal service, the USO, and
monopoly laws for commenters who are
not familiar with these topics. The
following discussion focuses on selected
official proceedings and reports
prepared for U.S. and foreign
government agencies that are readily
accessible in English. Within these
proceedings and reports, readers will
find references to the far richer array of
academic studies and advocacy papers
that illuminate the issues presented by
the present study.
Four earlier Commission proceedings
appear to address issues related to the
present proceeding. In Regulations
Implementing Private Express Statutes,
Docket No. RM76–4 (1976), the
Commission concluded that the postal
laws did not at that time grant the
Commission jurisdiction over
regulations defining the postal
monopoly. In Monopoly Theory Inquiry,
Docket No. RM89–4 (1989), the
Commission concluded a general
inquiry into the economics of the postal
monopoly and issued a lengthy report
on its findings. Records of these
proceedings may be found in the
archives section of the Commission’s
Internet site. In addition, the
Commission has recently initiated two
public inquiries related to service
standards for market dominant
universal services. In Service Standards
and Performance Measurement for
Market Dominant Products, Docket No.
PI2007–1 (2007), the Commission
developed comments on service
standards proposed by the Postal
Service. In Service Performance
Measurement Systems For Market
Dominant Products, Docket No. PI2008–
1 (ongoing), the Commission is
reviewing service performance
measurement procedures proposed by
the Postal Service.
Commission staff and subcontractors
for the Commission have also prepared
several papers on the economics of
universal service and the postal
monopoly. These are posted on the
Commission’s Internet site under
‘‘Speeches and Papers, Papers, PRC
Staff.’’ Professor Richard B. Kielbowicz
prepared a study on the history of
universal postal service under contract
with the Commission; it can be found
under ‘‘Speeches and Papers, Papers,
Kielbowicz.’’ More generally, the
Commission’s Internet site includes a
wealth of legislative histories, judicial
decisions, and economic data pertaining
to the period after enactment of the
Postal Reorganization Act of 1970
(PRA).
Other U.S. governmental analyses of
universal service and the postal
monopoly include the following: in
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2003, the President’s Commission on
the United States Postal Service
undertook an extensive review of postal
policy in the United States; much of the
analyses, testimonies, and studies
prepared for the President’s
Commission bear directly on issues
presented by the current study.5 The
General Accounting Office has prepared
many reports on postal service and
postal policy; two of these specifically
address the monopoly laws: Postal
Service Reform Issues Relevant to
Changing Restrictions on Private Letter
Delivery (1996) (2 volumes), and U.S.
Postal Service: Information About
Restrictions on Mailbox Access (1997).
In 1973, the Board of Governors of the
Postal Service issued a report on the
postal monopoly law, Statutes
Restricting Private Carriage of Mail and
Their Administration, required by the
PRA.6 The Postal Service also offers a
history of the postal service in the
United States on its Internet site.7
Outside the United States, several
governments have undertaken official
inquiries similar to the present study. In
particular, PostCom, the postal regulator
in the United Kingdom, has conducted
extensive consultations into the
appropriate scope of universal service
and the need for the postal monopoly.
Documents posted on PostCom’s
Internet site include detailed economic
and legal analyses, although it should be
noted that postal laws in the United
Kingdom differ significantly from those
in the United States.8 The Commission
of the EU has also contracted for, and
posted on, the Internet numerous
analyses of universal service, the postal
monopoly, and economics of postal
services.9 In Australia, the National
Competition Council issued a detailed
review of the postal law in 1989, Review
of the Australian Postal Corporation
Act.10 In New Zealand, a lively account
of postal reform is provided by Vivienne
Smith, Reining in the Dinosaur: The
Remarkable Turnaround of New
Zealand Post (1989), a book published
5 See https://www.treasury.gov/offices/domesticfinance/usps for the final report and documents of
the Commission.
6 Also reprinted in House Comm. on Post Office
and Civil Service, 93d Cong., 1st Sess., Comm. Print
No. 93–5 (1973).
7 See https://www.usps.com/postalhistory/
welcome.htm.
8 See https://www.psc.gov.uk/universal-service/
defining-the-universal-service.html and https://
www.psc.gov.uk/policy-and-consultations/
consultations/market-opening-timetable.html.
9 See https://ec.europa.eu/internal_market/post/
studies_en.htm for a list of all postal studies
prepared for the European Commission.
10 See https://www.ncc.gov.au/index.asp under
‘‘Communications, Australia Post.’’
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by New Zealand Post and available from
Internet book sellers.
V. Public Representative
Section 505 of title 39 requires the
designation of an officer of the
Commission in all public proceedings to
represent the interests of the general
public. The Commission hereby
designates Emmett Rand Costich to
serve as the Public Representative,
representing the interests of the general
public. Pursuant to this designation, he
will direct the activities of Commission
personnel assigned to assist him and,
will, upon request, provide their names
for the record. Neither he nor any of the
assigned personnel will participate in or
provide advice on any Commission
decision in this proceeding.
VI. Discussion Memorandum for Use in
Preparing Comments on Universal
Postal Service and the Postal Monopoly
Laws
Section 702 of the PAEA requires the
Postal Regulatory Commission to
prepare a report on ‘‘universal postal
service and the postal monopoly in the
United States * * * including the
monopoly on the delivery of mail and
on access to mailboxes.’’ Public Law
109–435, § 702, 120 Stat. 3198, 3243.
This report on universal postal service
and the postal monopoly laws is to be
submitted to Congress and the President
by December 19, 2008.
The purpose of this memorandum is
to stimulate discussion by identifying a
number of topics and specific questions
that commenters may wish to address.
The list of topics and questions is not
intended to exclude commenters from
presenting views or opinions on other
topics or issues.11
A. Topic No. 1: Scope of ‘‘Universal
Postal Service’’ and ‘‘Universal Service
Obligation’’
1. Topic No. 1.1: ‘‘Universal Postal
Service’’
At the beginning of the 21st century,
it is readily apparent that the United
States is served by a national system of
collection and delivery services that is
‘‘universal’’ in many respects. Almost
every person in every corner of the
country can send a letter or document
or parcel to almost anyone in every
corner of the country and expect the
addressee to receive the letter,
document, or parcel. Indeed, in many
cases, the sender may choose among
different price/service options offered
by the Postal Service and private
11 The views set forth in this section do not
necessarily reflect the opinions or positions of the
Commission or any individual Commissioner.
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delivery services. Which of these
services should be regarded as
‘‘universal services’’ and which should
be regarded as non-universal delivery
services? Are only services offered by
the Postal Service to be considered
‘‘universal services’’ despite the
national reach of several private
delivery services individually and the
network of private delivery services
collectively? Put differently, should an
evaluation of the ‘‘needs and
expectations of the United States
public’’ consider only services provided
by the Postal Service? Indeed,
considering the Postal Service alone, are
all its services ‘‘universal services’’ or
only some?
‘‘Universal service’’ does not appear
at all in the U.S. Code. Nor does the
PAEA separately define ‘‘universal
service.’’ The PAEA uses ‘‘universal
service’’ in only two places, neither is
included in the U.S. Code; the section
requiring a study of universal service
and the postal monopoly (section 702)
and the section requiring a study of the
future business model of the Postal
Service (section 710). Nonetheless, for
purposes of the current report, the term
‘‘universal service’’ must be defined in
some manner and that definition must
be consistent with the requirements of
section 702 of the PAEA and the intent
of Congress in requiring this report.
The text of the PAEA is one potential
starting point for interpreting the term
‘‘universal service.’’ Section 702
employs ‘‘universal service’’ or
‘‘universal postal service’’ nine times.
From its context, ‘‘universal service’’
could be characterized by scope and
constrained by legal standards set out in
current laws, including rules,
regulations, policy statements, and/or
practices of the Postal Service.
‘‘Universal service’’ may be said to
‘‘cover’’ geographic areas and/or groups
of persons, and some areas or groups
may be said to be not now covered by
universal service. An obligation to
provide ‘‘universal service’’ may result
in costs for the Postal Service. Section
710, the only other provision of the
PAEA to refer to ‘‘universal service,’’
uses the phrase twice, most significantly
in reference to ‘‘continued availability
of affordable, universal postal service
throughout the United States.’’
Sections 101 and 403 of the U.S. Code
can also be read to provide standards for
‘‘universal service.’’ A review of these
two sections suggests ‘‘universal
service’’ could be read to refer to a
postal service or set of postal services
that is characterized by several features
or service elements that are attained to
such a degree or in such a manner that
postal service may be considered
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‘‘universal.’’ Together sections 101 and
403 identify service elements and the
level of attainment which could be used
to define a ‘‘universal service’’:
a. Geographic scope. ‘‘Universal
service’’ provides services ‘‘throughout
the United States’’ (section 403(a)) that
serve ‘‘all areas’’ and ‘‘all communities’’
(section 101(a)), especially rural areas
(section 101(b)) and ‘‘as nearly as
practicable the entire population of the
United States’’ (section 403(b)(1)) and
also provides services to or from
military personnel abroad (section
403(a)).
b. Range of products. ‘‘Universal
service’’ transmits a range of postal
items including ‘‘written and printed
matter, parcels, and like materials’’
(section 403(a)) suited to ‘‘the needs of
different categories of mail and mail
users’’ (section 403(b)(2)).
c. Access facilities. ‘‘Universal
service’’ provides mailers ‘‘ready
access’’ to the postal system through an
appropriate level of post offices and
other access facilities ‘‘consistent with
reasonable economies’’ (section
403(b)(3)), especially in rural areas
(section 101(b)).
d. Delivery services. ‘‘Universal
service’’ provides for the receipt,
transmission, and delivery of postal
items (section 403(a)).
e. Rates and affordability of service.
‘‘Universal service’’ charges prices that
are fair, reasonable (section 403(a)), nondiscriminatory (section 403(c)), and
based on a ‘‘fair and equitable’’
apportionment of costs (section 101(d)).
f. Quality of service. ‘‘Universal
service’’ provides for the prompt,
reliable, efficient (section 101(a)), and
adequate (section 403(a)) transmission
of postal items, with particular attention
to the ‘‘most expeditious’’ transmission
of letters (section 101(e)).
Such a six-pronged concept of
universal service would appear to be
fully consistent with the manner in
which the term ‘‘universal service’’ is
used in section 702.
At a conceptual level, a proposed
definition of ‘‘universal service’’ may be
similar to the concept of universal
service formally adopted in the EU. In
the EU, the Postal Directive 12 refers to
12 Directive 1997/67/EC of the European
Parliament and of the Council of 15 December 1997
on common rules for the development of the
internal market of community postal services and
the improvement of quality of service, OJ L 15, 21
Feb. 1998, p. 14, as amended by Directive 2002/39/
EC of the European Parliament and of the Council
of 10 June 2002 amending Directive 97/67/EC with
regard to further opening to competition of
community postal services, OJ L176, 5 July 2002,
p. 21 and Directive 2008/6/EC of the European
Parliament and of the Council of 20 February 2008
amending Directive 97/67/EC with regard to the full
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universal service as the ‘‘permanent
provision of a postal service of specified
quality at all points in their territory at
affordable prices for all users.’’ The six
service elements derived from sections
101 and 403 of the U.S. law seem to be
reflected in the elements of universal
service described in the EU Postal
Directive. The EU Postal Directive
includes a seventh service element,
users’ rights of complaint and redress,
which has no counterpart in sections
101 and 403. A broad similarity in how
the term ‘‘universal service’’ is used in
the PAEA and EU Postal Directive also
appears to be plausible since it appears
possible that the postal reform debate in
Europe in the late 1980s and early 1990s
led to use of the term ‘‘universal
service’’ in the somewhat later postal
reform debates in the United States.
On the other hand, the six-pronged
approach towards defining ‘‘universal
postal service’’ described above does not
include all of the public service
activities of the Postal Service nor all of
the characteristics of the postal services
offered by the Postal Service. This
concept does not, for example, include
the assistance that the Postal Service
provides to the Department of State in
the processing of passport applications
(other than the provision of postal
services for such applications).
Likewise, it does not include law
enforcement activities of the Postal
Inspection Service. Such activities are
certainly ‘‘public services,’’ but they do
not seem to be ‘‘universal postal
service’’ as that term is used in section
702 of the PAEA.13
Likewise, the foregoing approach to
‘‘universal postal service’’ would not
include attributes of the Postal Service
which are not elements of the services
actually provided the public. For
example, section 101 refers to at least
two objectives of national postal policy
that are not included in the six-pronged
approach described above: (1) Fair
conditions of employment (sections
101(c) and 101(g)), and (2) a fair and
equitable distribution of mail
transportation contracts (section 101(f)).
While these goals affect the manner in
which the Postal Service operates, they
do not seem to relate to the ‘‘service’’
provided to mailers and addressees.
According to common usage, a
‘‘service’’ is the ‘‘helping or doing work
accomplishment of the internal market of
community postal services, OJL 52, 27 February
2008, p. 3.
13 Section 3651(c) of title 39, added by the PAEA,
appears to draw a similar distinction when it refers
to ‘‘other public services or activities which, in the
judgment of the Postal Regulatory Commission,
would not otherwise have been provided by the
Postal Service but for the requirements of law.’’
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for someone else.’’ 14 Preliminarily, it
would appear that the term ‘‘universal
service’’ as used in section 702 of the
PAEA refers to services provided by the
Postal Service and not to non-service
attributes of the Postal Service. This
view appears to be supported by a
review of legislative history. Committee
reports leading to the PAEA treat
universal service and employment as
separate issues. The U.S. House of
Representatives report refers to ‘‘The
legislation creates a modern system of
rate regulation, establishes fair
competition rules and a powerful new
regulator, addresses the Postal Service’s
universal service obligation and the
scope of the mail monopoly, and
institutes improvements to the collective
bargaining process.’’ (Emphasis added.)
H.R. Rept. No. 109–66 (2005) at 43.
Thus, the universal service obligation
seems distinguishable from the
collective bargaining process. Likewise,
the U.S. Senate report refers to ‘‘the
basic features of universal service—
affordable rates, frequent delivery, and
convenient community access to retail
postal services.’’ S. Rept. No. 108–318
(2004) at 1. Likewise, in Congressional
debates, leaders in the preparation of
the PAEA also seemed to indicate an
understanding that universal service
and employment practices were
different matters of concern. See, e.g.,
152 Cong. Rec. H6512 (July 26, 2005)
(remarks of Mr. T. Davis of Virginia)
(‘‘For consumers it preserves universal
service, maintains high-quality
standards, and eliminates unfair mailing
costs so that they have an affordable and
reliable means of communication. For
workers it protects collective bargaining
and offers whistleblower protections
that are needed to ensure safe
employment.’’); 152 Cong. Rec. H6513
(July 26, 2005) (remarks of Mr. T. Davis
of Virginia) (‘‘Universal service. First
and foremost, the bill preserves the
Postal Service’s commitment to
universal service, the guaranteed
delivery 6 days a week to each and
every address in the United States.’’);
152 Cong. Rec. H9179 (December 8,
2006) (remarks of Mr. Waxman of
California) (‘‘This bill has many
highlights. It provides for ratemaking
flexibility, rate stability, universal
service, high quality standards, and
collective bargaining.’’); 152 Cong. Rec.
H9180 (December 8, 2006) (remarks of
Mr. McHugh of New York) (‘‘The
universal service mission of the Postal
Service remained the same, as stated in
title 39 of the U.S. Code: ‘The Postal
Service shall have as its basic function
14 See The New Oxford American Dictionary
2001.
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the obligation to provide postal services
to bind the Nation together through the
personal, educational, literary, and
business correspondence of the people.
It shall provide prompt, reliable, and
efficient services to patrons in all areas
and shall render postal services to all
communities.’’’)
It should also be noted that although
the foregoing definition of ‘‘universal
postal service’’ and EU Postal Directive
address similar service elements, they
differ significantly in the level of
attainment or manner of
implementation. As a result, a broadly
defined definition of ‘‘universal
service,’’ like the one set forth above, is
quite different from the more
specifically defined definition of
‘‘universal service’’ set out in the Postal
Directive. For example, the EU
definition of ‘‘universal service’’
excludes express services and parcel
services for parcels weighing more than
20 kg. (44 pounds), while section 702
makes no such distinction. Similarly,
the EU definition includes within the
universal service area services provided
by private operators, whereas section
702 is unclear about the applicability of
the concept to private delivery services.
A working definition of universal
service for purposes of the study. In
light of the preceding discussion, one
possibility would be for the Commission
to use a working definition of universal
service like the following:
Universal service refers to a postal
service or set of postal services that is
characterized by six features or service
elements that are attained to such a
degree or in such a manner that postal
service may be considered ‘‘universal.’’
The six service elements are as follows,
and in each case the level or manner of
attainment presently considered
characteristic of universal service are
noted: (1) Geographic scope. Universal
service provides services throughout the
United States, serving all areas and all
communities, especially rural areas, and
as nearly as practicable the entire
population of the United States and also
providing service to or from military
personnel abroad. (2) Range of products.
Universal service transmits a range of
postal items including written and
printed matter, parcels, and like
materials suited to the needs of different
categories of mail and mail users. (3)
Access. Universal service provides
mailers ready access to the postal
system through an appropriate level of
post offices and other access facilities
consistent with reasonable economies,
for both urban and rural areas. (4)
Delivery services. Universal service
provides for the receipt, transmission,
and delivery of postal items. (5) Rates
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and affordability of service. Universal
service charges prices that are fair,
reasonable, non-discriminatory, and
based on a fair and equitable
apportionment of costs. (6) Quality of
service. Universal service provides for
the prompt, reliable, efficient, and
adequate transmission of postal items,
with particular attention to the most
expeditious transmission of letters.
Such a definition is self-evidently
imprecise and open-ended in several
respects. Different observers could come
to different conclusions, such as when
universal postal service was first
attained in the United States or whether
the Postal Service presently provides
prompt, reliable, efficient, and adequate
services in all cases or serves as nearly
as practicable the entire population of
the United States. This definition leaves
unresolved whether private operators
may be considered to provide a portion
of the universal service. Nonetheless,
this open-endedness would seem to be
generally consistent with the way the
term ‘‘universal service’’ is used in the
PAEA. Under such a definition,
‘‘universal service’’ would refer to a
general concept and not to specific
pattern of service.
Even if open-ended, such a working
definition of ‘‘universal service’’ (or an
alternative) would offer guidance for the
report required by section 702 of the
PAEA. For example, such a definition
would permit a determination of what
aspects of national postal service should
be included in the ‘‘history and
development’’ and ‘‘scope and
standards’’ of universal service. Guided
by such a definition, the study can focus
on the history, development, standards,
and future of the six service elements
identified and the concept of universal
service generally.
It bears emphasis that a working
definition of ‘‘universal postal service’’
is proposed only for the purposes of
putting bounds on the scope of the
report required by section 702. The
proposed definition should not be
interpreted as a proposal for a statutory
definition of ‘‘universal postal service,’’
still less as a definition of the scope of
a ‘‘universal service obligation’’ (see
next section).
Commenters should carefully
consider the foregoing definition of the
concept of ‘‘universal postal service’’
and should comment on whether this,
or some other, definition should be used
in preparing the Commission’s report.
Questions that should be addressed
include: What factors should be
included/excluded from the definition
of ‘‘universal postal service?’’ What
specific statutory text, legislative history
or other considerations support the
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commenter’s proposed definition of
‘‘universal postal service’’?
2. Topic No. 1.2: ‘‘Universal Service
Obligation’’
The USO is a legal measure that
guarantees availability of, in the words
of the EU Postal Directive, ‘‘a universal
postal service encompassing a minimum
range of services of specified quality to
be provided in all Member States at an
affordable price for the benefit of all
users, irrespective of their geographical
location.’’ 15 The USO may take the form
of a statutory command to government
as a whole or to its public postal
operator. If government is the object of
the USO, then government will typically
direct an independent postal regulator
or ministry to administer a licensing
system that obliges one or more postal
operators to provide universal services.
The USO seeks to insure that a basic
level of universal postal services will be
maintained. The USO does not have to
be a set of objectives for the services
actually provided. For example, the
scope of universal postal service
actually provided by the public postal
operator (and perhaps other postal
operators obliged to provide universal
services) could exceed minimum
standards set by a USO. For example, in
a given country, the USO might require
a delivery to all addresses at least five
days per week, but the public postal
operator might deliver six days a week
to some or all addresses because it
considers six-day service good business.
Similarly, the USO might require that at
least 80 percent of postal items be
delivered by the end of the first business
day after posting, whereas the public
postal operator might in fact deliver 90
percent of postal items within that
period. Viewed in this way, ‘‘universal
service’’ would be an operational
concept, whereas ‘‘universal service
obligation’’ would be a legal concept.
It should be noted that the foregoing
definition of the universal service
obligation would not include several
things. While the Postal Service was
established by law to provide postal
services to the nation generally, it must
supply these services in accordance
with a host of statutory requirements.
According to the foregoing definition,
however, not all of these requirements
would necessarily be ‘‘universal
service’’ requirements. Many
requirements, for example, treatment of
employees according to certain
governmental standards or standards
with respect to Federal contracting, do
15 Directive 1997/67/EC, OJ L 15, 21 February
1998, p. 14, Recital 11.
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not relate to the six service elements of
universal service identified in section 1.
They would remain even if the Postal
Service were not obliged to provide
universal service. Hence, such
requirements, although admittedly legal
constraints imposed on the Postal
Service, would not be considered
universal service requirements or part of
the universal service obligation. Nor
would this approach include within the
concept of ‘‘universal service
obligation’’ requirements which the
Postal Service imposes on itself. By its
nature, an ‘‘obligation’’ seems to refer to
an externally-imposed requirement.
The ‘‘universal service obligation,’’ if
so defined, would include all legal
obligations imposed on the Postal
Service relating to the six service
elements of universal service: the
geographic scope of services, the range
of products, access facilities, delivery
services, level and structure of rates
(including non-discrimination), and
quality of service. This definition of the
USO would reach well beyond the
language of sections 101 and 403. Under
current law, there are four main sources
of legal standards for universal postal
service: the U.S. Code, appropriations
bills for the Postal Service, the
Universal Postal Convention, and
regulations adopted by the Commission.
The U.S. Code includes numerous
standards which relate the six prongs of
‘‘universal service’’ as provided by the
Postal Service. For example, section 407
makes clear that universal service
should include collection and delivery
of international mail as well as domestic
mail. On the other hand, the scope of
universal service is limited by sections
3001 to 3010, 3014, and 3015, which
prohibit carriage of certain non-mailable
items, and section 3682, which places
size and weight limits on mailable
matter. Section 3691 establishes
standards for quality of service. Several
provisions of the U.S. Code regulate
rates. Section 404(c) requires uniform
national rates for letters, while section
3638 requires uniform rates for books
and films. Sections 3403, 3404, 3626,
and 3629 provide for free or reduced
rates for certain items. Sections 3621 to
3634 require the Postal Regulatory
Commission to control rates according
to certain standards. Section 404(d)
requires the Postal Service to follow
certain procedures before closure of post
offices. Whatever net costs the Postal
Service incurs as a result of such legal
restrictions might be properly
considered costs of the USO.
The annual appropriations bill for the
Postal Service can affect the provision of
universal service in two ways. First, the
amount of money provided affects the
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scope of services that can be offered by
the Postal Service. Second, the
appropriations bill may include
substantive provisions (called ‘‘riders’’)
that direct how the Postal Service is to
spend the money appropriated. For
example, in the 2006 postal
appropriations bill, Congress included
two riders related to universal service:
(1) That six-day delivery and rural
delivery of mail shall continue at not
less than the 1983 level; and (2) that
none of the funds provided in this Act
shall be used to consolidate or close
small rural and other small post offices
in fiscal year 2006.
In the Universal Postal Convention
(2004), the United States agreed with
other member countries of the Universal
Postal Union to provide certain
universal services under certain
conditions until December 31, 2009.
These commitments relate primarily to
the geographic scope of services, the
quality of services, and the rates
charged.
The Postal Regulatory Commission
adopts regulations which create
standards for universal services,
primarily in the area of rates and
accounting for the costs that underlie
rates.
Commenters should consider the
foregoing approach to the concept of
‘‘universal service obligation’’ as an
interpretation of section 702 of the
PAEA. Other approaches can be
considered as well. Commenters are
invited to address such questions as:
a. What specific legal provisions
constitute a complete statement of the
current USO?
b. What should be included/excluded
from the concept of USO?
c. What specific statutory text,
legislative history, or other basis exists
to support a USO concept?
d. What is the precise scope of the
postal monopoly under current law?
e. What is the precise scope of the
mailbox monopoly under current law?
B. Topic No. 2—Historical Development
of Universal Service, the USO, and
Monopoly Laws
Specific questions regarding the
historical development of universal
service, the USO, and monopoly laws
which appear to be relevant to the
present study and which commenters
may wish to address include, but are not
limited to, the following:
1. When were the specific provisions
of the monopoly laws adopted? In each
case, what was the intent of Congress?
2. How has the precise scope of postal
monopoly law changed over the years?
3. How did the pattern of service
provided by the Post Office Department
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and later the Postal Service evolve into
the present universal service?
4. How did the legal authority of the
Post Office Department and later the
Postal Service develop with respect to
the six service elements of universal
service?
5. How and when did the general
concept of a USO evolve?
6. How are the monopoly laws and
USO related historically?
7. How has use of universal services
changed over the last five years, both in
terms of volumes and mail mix?
8. What have been the major factors
influencing demand for universal
services over the last five years both in
terms of volumes and mail mix?
9. What has been the effect of the
Internet on demand?
C. Topic No. 3—Universal Service:
Geographic Scope
Specific questions regarding the
geographic scope of universal service
and the postal monopoly which appear
to be relevant to the present study and
which commenters may wish to address
include, but are not limited to, the
following:
1. What geographic areas,
populations, communities,
organizations, or other groups or
entities, if any, are not currently covered
by the USO identified above?
2. What other gaps or deficiencies, if
any, exist in the current USO? For
example, a commenter may consider
that the current USO fails to address a
subject that should be addressed or sets
a standard inappropriately.
3. What geographic areas,
populations, communities,
organizations, or other groups or
entities, if any, are currently receiving
universal services that are deficient in
some manner? How should the word
‘‘deficient’’ be interpreted in this
context?
D. Topic No. 4—Universal Service:
Range of Product Offerings
Specific questions regarding the range
of product offerings which appear to be
relevant to the present study and which
commenters may wish to address (either
in terms of their own experience or in
terms of their views regarding the needs
of others) include, but are not limited to,
the following:
1. What postal products should be
legally assured service by a USO? What
products should be supplied according
to normal market arrangements between
mailers and sellers of postal services?
2. Should express services be covered
by the USO? Advertisements? FirstClass Mail such as statements and
invoices? Bulk First-Class
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advertisements? Single-Piece First-Class
Mail? Personal correspondence only?
Newspapers and magazines? Bulk
parcels? Single-piece parcels?
Competitive products generally? With
respect to each product covered by the
USO, what public policies require
coverage of that product?
3. How does the postal monopoly
affect the range of universal service
product offerings?
4. How should the postal monopoly
affect the range of universal service
product offerings?
5. Should universal service include
special services such as Registered Mail,
Certified Mail, and insurance for some
or all universal services (as in the EU)?
Should the USO require provision of
such special services?
6. Should universal service include a
lower priority, lower priced alternative
for the delivery of letters (as in the
United Kingdom and many other
countries)? Should the USO require
introduction of such a ‘‘second priority’’
letter service?
7. For parcels, is there an appropriate
weight limit for the USO?
8. In the case of each product, what
special considerations, if any, support
inclusion or exclusion of the
international postal products?
9. How should changes in mail
volumes and mail mix over the next 3,
5, 10, or 15 years affect the USO?
10. To what extent, if any, should the
universal service obligation permit the
Postal Service (and/or other operators
engaged in provision universal service)
to expand or contract the geographic
scope of universal service compared to
that presently served by the Postal
Service?
E. Topic No. 5—Universal Service:
Access to Postal Facilities and Services
Questions regarding access to postal
facilities and services which appear to
be relevant to the present study and
which commenters may wish to address
(either in terms of their own experience
or in terms of their views regarding the
needs of others) include, but are not
limited to, the following:
1. To what extent will the need for
access facilities (including post offices,
contract post offices, and collection
boxes) expand or contract in 3 years, 5
years, 10 years, and 15 years?
2. What types of transactions require
mailers to come to a post office in order
to post a postal item? To what extent
will changing technologies modify the
demand for such retail services in 3
years, 5 years, 10 years, and 15 years?
3. What types of transactions require
mailers to come to a post office in order
to receive postal items? To what extent
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will changing technologies modify the
demand for such services in 3 years, 5
years, 10 years, and 15 years?
4. To what extent do contract post
offices (i.e., stores providing postal
services operated by non-USPS
personnel) serve as satisfactory
substitutes for USPS post offices? Under
what circumstances do they not?
5. To what extent should access
facilities be assured by inclusion in a
universal service obligation in 3 years,
5 years, 10 years, and 15 years? To what
extent should USO access requirements,
if any, apply differently to different
universal service products?
6. To what extent should the Postal
Service be permitted by the USO to
substitute contract post offices for USPS
post offices? 16
7. To what extent should the USO in
the future (i.e., in 3 years, 5 years, 10
years, and 15 years) require delivery to
each address in the nation (as in the
EU)?
8. To what extent should the USO in
the future (i.e., in 3 years, 5 years, 10
years, and 15 years) include
requirements for delivery of postal items
to persons without an address? 17
9. Does the mailbox monopoly still
serve a useful role in supporting
universal service and the universal
service obligation?
10. What changes, if any, should be
made to the mailbox monopoly to
enhance the ability of mailers to reach
mail recipients or to broaden the range
of services available to mail recipients?
F. Topic No. 6—Universal Service:
Frequency of Delivery Commenters Are
Invited To Comment on Their
Anticipated Needs and Expectations
With Respect to Frequency of Universal
Services
1. What are the major factors that
influence the needs and expectations of
mailers with respect to delivery
frequency?
2. What are the major factors that
influence the needs and expectations of
addressees with respect to delivery
frequency?
3. To what extent would it be
appropriate for universal service in the
future (i.e., in 3 years, 5 years, 10 years,
and 15 years) to provide for a delivery
frequency of 7, 6, 5, 4, 3, or 2 days per
week, i.e., more or less than currently
provided by the Postal Service?
16 In some countries, like the United Kingdom,
more than 90 percent of post offices are contract
post offices.
17 See, e.g., Currier v. Potter, 379 F.3d 716 (9th
Cir. 2004) in which the court upheld an order by
the Postal Service denying homeless individuals
no-fee postal mailboxes and refused to provide
them general delivery service anywhere but a at
main, downtown post office.
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4. To what extent should the legal
standards set out in the USO permit a
delivery frequency of 7, 6, 5, 4, 3, or 2
days per week, i.e., more or less than
currently provided by the Postal
Service?
5. To what extent would it be
appropriate for universal service in the
future (i.e., in 3 years, 5 years, 10 years,
and 15 years) to vary delivery frequency
by the volume and characteristics of
mail, by, for example, providing more
frequent delivery for letters than for
advertisements or more frequent
delivery in areas that receive high
volumes of mail than in areas that
receive low volumes of mail?
6. To what extent should the legal
standards set out in the USO permit
universal service in the future to vary
delivery frequency by the volume and
characteristics of mail?
7. To what extent would mailers be
interested in a discount service that
provides less than six days per week?
To what extent would mailers be
interested in a higher priced service that
includes Sunday delivery?
8. What implications, if any, does the
postal monopoly have for the frequency
of delivery of universal services?
G. Topic No. 7—Universal Service
Obligation: Rates and Affordability of
Service
1. Should the USO in the future (i.e.,
3 years, 5 years, 10 years, and 15 years)
require that rates for universal service
are ‘‘affordable’’ (as in the EU)? To what
extent should affordability assurances, if
any, apply differently to different
universal service products? How should
‘‘affordable’’ be defined?
2. Should the USO in the future (i.e.,
3 years, 5 years, 10 years, and 15 years)
require that rates for universal services
are not unduly or unreasonably
discriminatory (see 39 U.S.C. 403(c))?
To what extent should such
prohibitions, if any, apply differently to
different universal service products?
3. Should the USO in the future (i.e.,
3 years, 5 years, 10 years, and 15 years)
require that increases in rates for market
dominant universal services are limited
to increases in the Consumer Price
Index applied at the class level (see 39
U.S.C. 3622)? To what extent should
such controls apply differently to
different market dominant universal
service products?
4. To what extent, if at all, should the
USO in the future (i.e., 3 years, 5 years,
10 years, and 15 years) regulate rates for
personal correspondence or single-piece
postal items in a different manner from
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regulation of rates for bulk market
dominant products? 18
5. To what extent, if at all, should the
USO in the future (i.e., 3 years, 5 years,
10 years, and 15 years) require that rates
for each class of mail for the
transmission of letters be uniform
throughout the United States (see 39
U.S.C. 404(c))?
6. To what extent, if at all, should the
USO in the future (i.e., 3 years, 5 years,
10 years, and 15 years) permit
introduction of rates for market
dominant bulk mail that vary according
to the cost of delivery? According to the
costs of transportation from origin? For
example, for bulk mail, the Postal
Service might charge more for delivery
in high-cost areas and less for the
delivery in low-cost areas.19
7. What effect do the monopoly laws
have on the rates for universal services?
8. In the future (i.e., 3 years, 5 years,
10 years, and 15 years), if the monopoly
laws are repealed, how should the net
costs resulting from imposition of the
USO on the Postal Service (and perhaps
other postal operators) be paid for? By
a tax on letters delivered to low-cost
delivery areas by all postal operators? 20
By a tax on all letters delivered by all
postal operators? By a tax on other
postal products? By public funds
appropriated by Congress?
rwilkins on PROD1PC63 with NOTICES
H. Topic No. 8—Universal Service:
Quality of Service
Specific questions regarding quality of
service which appear to be relevant to
the present study and which
commenters may wish to address (either
in terms of their own experience or in
terms of their views regarding the needs
of others) with respect to the quality of
service of universal services include, but
are not limited to, the following:
1. How should the quality of service
be measured for universal service?
2. Is security of the mail, such as
‘‘sealed against inspection for FirstClass Mail,’’ a part of universal service
quality?
3. Should the USO include quality of
service requirements for universal
services established by the Commission?
For which products?
18 For example, in the United Kingdom, PostCom
has grouped market dominant products into two
baskets for purposes of administering price caps.
The first basket includes ‘‘captive’’ single-piece
items, and the second basket includes ‘‘noncaptive’’ bulk items. See PostCom, 2006 Royal Mail
Price and Service Quality Review: Initial Proposals
(June 2005) at paras. 3.24 et seq.
19 Bulk mail rates that vary by cost of delivery are
becoming accepted in the European Union. For a
discussion of policy implications, see PostCom,
Royal Mail’s Retail Zonal Pricing Application:
PostCom’s Proposals (August 2007).
20 Such a tax would seemingly mimic the
economic effect of the postal monopoly.
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17:09 Apr 29, 2008
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4. Should the USO require monitoring
of the performance of the universal
services by the Commission? For which
products?
5. Do types of mail delivery service
(e.g., curb box, door slot, or corner
cluster box) present universal service
quality issues?
4. What is the authority of the
Commission to adopt regulations to
further define the scope of the postal
monopoly and mailbox monopoly?
5. Would changes in the universal
service obligation require changes in the
postal monopoly or the mailbox
monopoly? If so, how and why?
I. Topic No. 9—Methods of Calculating
the Cost of the Universal Service
Obligation and Postal Monopoly
Specific questions which appear to be
relevant to the present study and which
commenters may wish to address (either
in terms of their own experience or in
terms of their views regarding the needs
of others) include, but are not limited to,
the following:
1. What mathematical methodologies
exist for calculating the net cost of the
USO? Which methodology is to be
preferred? Why?
2. What have been the most
significant efforts to calculate the net
cost of the USO in the U.S. and abroad?
What were the results?
3. What is the current net cost, if any,
of the USO in the United States? Under
what assumptions?
4. How can the net benefit of the
postal monopoly and mailbox monopoly
be calculated?
5. What is the net benefit to the Postal
Service, if any, of the postal monopoly
and mailbox monopoly in the United
States? Under what assumptions?
6. To what extent do net benefits from
the postal monopoly and/or the mailbox
monopoly (if any) cover the net costs
resulting from the USO (if any)? How?
Precisely who benefits and who is
disadvantaged by such a transfer of
funds?
7. To the extent that there is a net cost
resulting from the USO what funding
mechanisms exist to cover this cost?
What are the pros and cons of each?
K. Topic No. 11—Universal Service, the
Universal Service Obligation, and the
Postal Monopoly in Other Countries
The effect of postal reform laws on the
USO and postal monopoly laws in other
industrialized countries may provide
valuable insights into the potential
implications of changes in the USO and
postal monopoly laws in the United
States. Commenters may wish to
provide views and analyses of the
evolution of universal service, the USO,
and the postal monopoly in other
industrialized countries and to
comment upon the possible relevance,
or lack of relevance, of such examples
for the current study.
J. Topic No. 10—The Implications of the
Universal Service Obligation for the
Postal and Mailbox Monopolies
Specific questions which address the
possible implications of the USO for the
postal and mailbox monopolies include,
but are not limited to, the following:
1. What is the authority of the Postal
Service to adopt regulations to further
define or affect the scope of the USO?
2. What is the authority of the
Commission to adopt regulations to
further define or affect the scope of the
USO?
3. What is the authority of the Postal
Service to adopt regulations to further
define the scope of the postal monopoly
and mailbox monopoly? 21
21 See Federal Trade Commission, Accounting for
Laws That Apply Differently to the United States
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Fmt 4703
Sfmt 4703
L. Topic No. 12—Other Issues
Commenters may also desire to
provide any views and analyses on
subjects not covered by any of the
preceding topic headings:
1. What will be the most important
factors influencing the demand for
universal services over the next 3, 5, 10,
or 15 years?
2. What effects will it have on the
demand for universal services over the
next 3, 5, 10, or 15 years?
3. What effect will environmental
issues have on demand over the next 3,
5, 10, or 15 years?
4. To what extent will new
technologies increase or alter the
demand for universal service by
changing the nature of postal services?
5. What factors affect the decision to
use alternative means of
communications, either electronic (e.g.,
Internet for bill presentment, bill
payment, and advertising) or physical
(e.g., newspapers, alternative delivery
services for advertising, private express
companies)?
6. In particular, what would be the
effect on demand of changes in the rates
of universal services relative to changes
in the Consumer Price Index? Consider
large changes as well as small and price
reductions as well as price increases.
7. What is the importance of universal
postal service relative to the universal
telephone system? Universal Internet
service? Private delivery services?
Newspaper advertising? Other media?
Postal Service and Its Private Competitors (2007) at
16 (‘‘The PAEA also repealed the statutory authority
for the USPS to issue regulations to define the scope
of its monopoly.’’).
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8. What broader social, economic, and
technological trends may affect the
future needs and expectations of society
generally with respect to universal
service over the next 3 years, 5 years, 10
years, and 15 years?
VII. Ordering Paragraphs
It is ordered:
1. As set forth in the body of this
notice, Docket No. PI2008–3 is
established for the purpose of receiving
comments regarding universal postal
service and the postal monopoly.
2. Interested persons may submit
comments no later than June 30, 2008.
3. Reply comments also may be filed
no later than July 29, 2008.
4. Emmett Rand Costich is designated
as the Public Representative
representing the interests of the general
public in this proceeding.
5. The Secretary shall cause this
notice to be published in the Federal
Register.
By the Commission.
Garry J. Sikora,
Acting Secretary.
[FR Doc. E8–9464 Filed 4–29–08; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
28252; 812–13508]
Thrivent Mutual Funds, et al.; Notice of
Application
April 24, 2008.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice of an application under
section 6(c) of the Investment Company
Act of 1940 (‘‘Act’’) for an exemption
from rule 12d1–2(a) under the Act.
AGENCY:
Applicants
request an order to permit funds of
funds relying on rule 12d1–2 under the
Act to invest in certain financial
instruments.
APPLICANTS: Thrivent Mutual Funds
(‘‘TMF’’), Thrivent Series Fund, Inc.
(‘‘TSF,’’ together with TMF, the
‘‘Funds’’), Thrivent Asset Management,
LLC (‘‘TAM’’), Thrivent Financial for
Lutherans (‘‘TFL’’) and Thrivent
Investment Management Inc. (‘‘TIMI’’).
FILING DATES: The application was filed
on February 20, 2008, and amended on
April 22, 2008.
HEARING OR NOTIFICATION OF HEARING: An
order granting the application will be
issued unless the Commission orders a
hearing. Interested persons may request
rwilkins on PROD1PC63 with NOTICES
SUMMARY OF APPLICATION:
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17:09 Apr 29, 2008
Jkt 214001
a hearing by writing to the
Commission’s Secretary and serving
applicants with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on May 19, 2008 and
should be accompanied by proof of
service on applicants, in the form of an
affidavit or, for lawyers, a certificate of
service. Hearing requests should state
the nature of the writer’s interest, the
reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by writing to the
Commission’s Secretary.
ADDRESSES: Secretary, Commission, 100
F Street, NE., Washington, DC 20549–
1090; Applicants, c/o David S. Royal,
Thrivent Financial for Lutherans, 625
Fourth Avenue, South, Minneapolis,
MN 55415.
FOR FURTHER INFORMATION CONTACT:
Lewis Reich, Senior Counsel, at (202)
551–6919, or Nadya B. Roytblat,
Assistant Director, at (202) 551–6821
(Division of Investment Management,
Office of Investment Company
Regulation).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained for a fee at the
Commission’s Public Reference Branch,
100 F Street, NE., Washington, DC
20549–1520 (telephone (202) 551–5850).
Applicants’ Representations
1. TMF is organized as a
Massachusetts business trust, and TSF
is organized as a Minnesota corporation;
both are registered as open-end
management investment companies
under the Act and each offers separate
investment portfolio series (‘‘Funds’’)
that may invest in other registered
investment companies (‘‘Underlying
Funds’’). Applicants request an
exemption to the extent necessary to
permit the Funds and any other existing
or future registered open-end
management investment companies and
their series advised by TAM or TFL or
any entity controlling, controlled by, or
under common control with, TAM or
TFL (included in the term ‘‘Funds’’) that
may invest in other Funds in reliance on
section 12(d)(1)G) of the Act or rule
12d1–2 under the Act to also invest in
financial instruments that may not be
securities within the meaning of section
2(a)(36) of the Act (‘‘Other
Investments’’) consistent with their
investment objectives, policies,
strategies and limitations. A Fund
eligible to rely on section 12(d)(1)G) of
the Act or rule 12d1–2 is referred to as
a ‘‘Fund of Funds.’’
PO 00000
Frm 00113
Fmt 4703
Sfmt 4703
2. TAM serves as the investment
adviser to each portfolio of TMF, and
TFL serves as the investment adviser to
each portfolio of TSF. Both TAM and
TFL are registered as investment
advisers under the Investment Advisers
Act of 1940 (the ‘‘Advisers Act’’). TAM,
a limited liability company organized
under the laws of Delaware, is a wholly
owned indirect subsidiary of TFL. TIMI,
the distributor of TMF, is a wholly
owned indirect subsidiary of TFL
registered as a broker-dealer under the
Securities Exchange Act of 1934
(‘‘Exchange Act’’), and as an investment
adviser under the Advisers Act.
Applicants’ Legal Analysis
1. Section 12(d)(1)(A) of the Act
provides that no registered investment
company (‘‘acquiring company’’) may
acquire securities of another investment
company (‘‘acquired company’’) if such
securities represent more than 3% of the
acquired company’s outstanding voting
stock or more than 5% of the acquiring
company’s total assets, or if such
securities, together with the securities of
other investment companies, represent
more than 10% of the acquiring
company’s total assets. Section
12(d)(1)(B) of the Act provides that no
registered open-end investment
company may sell its securities to
another investment company if the sale
will cause the acquiring company to
own more than 3% of the acquired
company’s voting stock, or cause more
than 10% of the acquired company’s
voting stock to be owned by investment
companies.
2. Section 12(d)(1)(G) of the Act
provides that section 12(d)(1) will not
apply to securities of an acquired
company purchased by an acquiring
company if: (i) The acquiring company
and acquired company are part of the
same group of investment companies;
(ii) the acquiring company holds only
securities of acquired companies that
are part of the same group of investment
companies, government securities, and
short-term paper; (iii) the aggregate sales
loads and distribution-related fees of the
acquiring company and the acquired
company are not excessive under rules
adopted pursuant to section 22(b) or
section 22(c) of the Act by a securities
association registered under section 15A
of the Exchange Act or by the
Commission; and (iv) the acquired
company has a policy that prohibits it
from acquiring securities of registered
open-end management investment
companies or registered unit investment
trusts in reliance on section 12(d)(1)(F)
or (G) of the Act.
3. Rule 12d1–2 under the Act permits
a registered open-end investment
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]]>Agencies
[Federal Register Volume 73, Number 84 (Wednesday, April 30, 2008)]
[Notices]
[Pages 23507-23516]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9464]
=======================================================================
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POSTAL REGULATORY COMMISSION
[Docket No. PI2008-3; Order No. 71]
Universal Service Obligation
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: A recent law requires the Commission to submit to Congress, by
late December 2008, a report on the universal service obligation. This
notice informs the public of the Commission's obligation to prepare the
report, provides background information, and seeks comments from the
public.
DATES: Initial comments due June 30, 2008; reply comments due July 29,
2008. See SUPPLEMENTARY INFORMATION section for field hearing dates.
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:
I. Introduction
Section 702 of the Postal Accountability and Enhancement Act,
Public Law 109-435 (PAEA) requires the Postal Regulatory Commission
(PRC or Commission) to submit a report to the President and Congress on
``universal postal service and the postal monopoly in the United States
* * * including the monopoly on the delivery of mail and on access to
mailboxes.'' The report is to be submitted not later than December 19,
2008.\1\
---------------------------------------------------------------------------
\1\ Section 702 of the PAEA requires that the report be
submitted ``[n]ot later than 24 months after the date of enactment *
* * .'' The PAEA was enacted on December 20, 2006. Since the final
day of the 24-month period for completing and submitting the report
falls on a Saturday and since the PAEA does not provide for an
extension to the next business day, the report must be submitted not
later than December 19, 2008.
---------------------------------------------------------------------------
In preparing its report, the PRC is required by section 702(c) to
``consult with the Postal Service and other Federal agencies, users of
the mails, enterprises in the private sector engaged in the delivery of
the mail, and the general public[.]'' Section 702(c) provides further
that the Commission shall address in its report any written comments
that it receives.
As part of its effort to fulfill these obligations, the Commission
is initiating this docket to solicit comments on universal postal
service and the postal monopoly. This notice also includes a Discussion
Memorandum intended to provide background information and to present
questions intended to elicit data and views that will assist the
Commission in preparing its report.\2\ The views set forth in the
Discussion Memorandum do not necessarily reflect the opinions or
positions of the Commission or any individual Commissioner. They are
provided solely for the purpose of stimulating discussion of relevant
subjects and of providing an organizational framework for obtaining
comments and suggestions.
---------------------------------------------------------------------------
\2\ See section IV. Discussion Memorandum For Use In Preparing
Comments On Universal Postal Service and the Postal Monopoly Laws
(Discussion Memorandum).
---------------------------------------------------------------------------
While commenters are free to organize their submissions in any
manner they choose, it will facilitate analysis by the Commission and
by other commenters if submissions follow the suggested topic outline
in this notice and the Discussion Memorandum as much as possible.
Commenters should, of course, feel free to address only such portions
of the topic outline, and only the specific questions, they wish.
This notice also includes a brief guide to sources of information
that may be of use to commenters in preparing their submissions.
Commenters are encouraged to use additional reference materials. The
Commission requests that, if possible, reference materials not
available from the Internet or readily available electronic databases
(such as Westlaw, Lexis-Nexis, the Library of Congress, the Government
Printing Office, and Journal Storage) be provided in a searchable pdf
format.
Initial comments are due 60 days after publication of this notice
in the Federal Register. Reply comments are due 90 days after
publication of this notice in the Federal Register. All comments and
suggestions received will be available for review on the Commission's
Web site at https://www.prc.gov.
In addition to this solicitation of comments, the Commission
intends to hold several public hearings at locations outside of
Washington, DC in order to obtain further information. The dates and
locations for those hearings are as follows: May 21, 2008 (2 p.m.),
Flagstaff City Hall, 211 West Aspen Avenue, Flagstaff, AZ 86001; June
5, 2008 (10 a.m.), City Hall/Court House Building, City Council
Chambers, 3rd Floor, 15 Kellogg Boulevard, St. Paul, MN 55102; and June
19, 2008 (2 p.m.), City Hall, 1 Junkins Avenue, Portsmouth, NH 03801.
Additionally, the Commission intends to sponsor an open workshop in
Washington, DC during May 2008 to receive public comment.
Further details on the field hearings and other steps to be taken
in this docket will be posted on the Commission's Web site at https://
www.prc.gov.
II. Required Contents of the Commission's Report
Section 702(a)(2) of the PAEA requires that the following subjects
be included in the Commission's report:
1. A comprehensive review of the history and development of
universal service and the postal monopoly, including how the scope and
standards of universal service and the postal monopoly have evolved
over time for the nation and its urban and rural areas;
2. The scope and standards of universal service and the postal
monopoly provided under current law * * *, and current rules,
regulations, policy statements, and practices of the Postal Service;
3. A description of any geographic areas, populations, communities
(including both urban and rural communities), organizations, or other
groups or entities not currently covered by universal service or that
are covered but that are receiving services deficient in scope or
quality or both; and
4. The scope and standards of universal service and the postal
monopoly likely to be required in the future in order to meet the needs
and expectations of the . . . public, including all types of mail
users, based on discussion of such assumptions, alternative sets of
assumptions, and analyses as the Postal Service considers plausible.
PAEA section 702(b) provides further that if the Commission decides
to recommend any changes to universal service and the postal monopoly
(whether those changes could be made under current law or would require
changes in current law), then the Commission must provide estimated
effects of each recommendation on the service, financial condition,
rates, and security of mail provided by the Postal Service. Finally,
with respect to each recommendation concerning the universal service
obligation or postal monopoly made in the reports required by PAEA
sections 701 and 702, the Commission is required to include:
[[Page 23508]]
1. An estimate of the costs * * * attributable to the obligation to
provide universal service under current law;
2. An analysis of the likely benefit of the current postal monopoly
to the ability of the Postal Service to sustain the current scope and
standards of universal service, including estimates of the financial
benefit of the postal monopoly to the extent practicable, under current
law; and
3. Any additional topics and recommendations the Commission deems
appropriate, together with estimated effects on service, financial
condition, rates, and the security of mail.
III. Issues for Comment
``Universal postal service'' is the term commonly used to refer to
postal service to all parts of the country. See United States Postal
Serv. v. Flamingo Indus. (USA) Ltd., 540 U.S. 736 at 741 (2004) (citing
39 U.S.C. 101, 403). The Postal Service's obligation to provide such
``universal service'' is often referred to as the universal service
obligation (USO). Although the USO lacks an express statutory
definition, it often is thought of as an obligation with
characteristics or features such as: (1) Geographic scope; (2) range of
product offerings; (3) access to postal facilities and services; (4)
frequency of delivery; (5) rates and affordability; and (6) quality of
service. A USO is generally supported by granting exclusive rights to
the postal administration to provide selected services--i.e., a postal
monopoly. A number of countries, mostly in Europe, have begun to reduce
or eliminate the postal monopoly over the past 10 years, while at the
same time taking care to ensure some minimum level of service to each
citizen. It is against this background that the United States Congress
mandated the Commission's report.
The Commission solicits comments from interested persons, including
other Federal agencies, users of the mails, enterprises in the private
sector engaged in the delivery of the mail, and the general public, on
any or all aspects of the subjects to be included in the Commission's
report and any additional topics and recommendations. Topics and
specific questions that persons may wish to address include, but are
not limited to, the following:
Topic No. 1--scope of ``universal postal service'' and ``universal
service obligation.'' Section 702(a)(2)(B) of the PAEA requires the
Commission to include in its report ``the scope and standards of
universal service and the postal monopoly provided under current law
(including sections 101 and 403 of title 39, United States Code), and
current rules, regulations, policy statements, and practices of the
Postal Service.'' Thus, one of the Commission's fundamental tasks in
preparing its report will be to define the concept of ``universal
postal service''--or, more simply, ``universal service.'' The essential
problem is that the term ``universal service'' is undefined in U.S.
postal laws. In other industrialized countries that have addressed
postal reform, the concept of universal postal service is linked to a
second, closely related concept, that of a ``universal service
obligation'' or USO. The USO is thus a legal obligation whereas
``universal postal service'' is a set of postal services. While title
39 includes standards that relate to the concept of ``universal
service,'' neither title 39, nor other Federal statutes, define
``universal service obligation.''
In the absence of explicit statutory definitions, do the six
factors listed above (i.e., geographic scope, range of product
offerings, access to facilities and services, frequency of delivery,
rates and affordability, and quality of services) adequately set forth
the parameters of universal service and a universal service obligation?
If not, what factors should, or legally must, be considered? In
addressing these issues, commenters should consider the information in
the Discussion Memorandum. Additional questions related to this topic
also can be found in the Discussion Memorandum.
Topic No. 2--historical development of universal service, the USO
and monopoly laws. Section 702(a)(2)(A) of the PAEA requires the
Commission's report to include ``a comprehensive review of the history
and development of universal service and the postal monopoly, including
how the scope and standards of universal service and the postal
monopoly have evolved over time for the Nation and its urban and rural
areas * * * .'' Specific questions related to this topic can be found
in the Discussion Memorandum.
Topic No. 3--universal service: geographic scope. Section
702(a)(2)(C) of the PAEA requires the report to include ``a description
of any geographic areas, populations, communities (including both urban
and rural communities), organizations, or other groups or entities not
currently covered by universal service or that are covered but that are
receiving services deficient in scope or quality or both.'' Specific
questions related to this topic can be found in the Discussion
Memorandum.
Topic No. 4--universal service: range of product offerings.
Commenters are invited to comment on their anticipated needs and
expectations with respect to the range of products that should be
included in the concept of universal service. Commenters may wish to
discuss their needs and expectations, as well as the needs and
expectations of others--for example, all companies in the same sector
or society generally. In providing their views, it would be helpful if
commenters could provide general, non-confidential information on their
current use of postal services, describing, if possible, current use by
subclass, shape, and weight. In particular, it would be helpful if
associations representing industrial sectors could provide estimates of
the current use of universal services by their sectors and a summary of
the needs and expectations of the sector for universal services in the
future. Questions related to this topic can be found in the Discussion
Memorandum.
Topic No. 5--universal service: access to postal facilities and
services. Commenters are invited to express their views on the need for
access to post offices, the types of services that require access to
post office facilities, the adequacy of existing post office
facilities, and the adequacy of substituting contract post offices or
other types of retail outlets for Postal Service post offices. In this
connection, commenters may also wish to address the mailbox monopoly
and its relationship with universal service and the universal service
obligation. Specific questions related to this topic can be found in
the Discussion Memorandum.
Topic No. 6--universal service: frequency of delivery. In most
parts of the United States, mail is delivered six days a week.\3\
Exceptions include delivery in certain remote areas in places such as
Alaska where deliveries are less frequent. In other areas, deliveries
of Express Mail are, for example, made seven days a week. Commenters
may wish to address the question of what level of frequency is
appropriate for universal services. Specific questions related to this
topic can be found in the Discussion Memorandum.
---------------------------------------------------------------------------
\3\ Congress has, for a number of years, included a requirement
of six-day-a-week delivery in various appropriation bills.
---------------------------------------------------------------------------
Topic No. 7--universal service obligation: rates and affordability
of service. The rates for universal services are of importance to both
the Postal Service and the customers who rely upon those services. Rate
levels play a critical role in determining what services are offered
and the affordability of those services. Specific questions
[[Page 23509]]
related to the issue of rates and affordability of service can be found
in the Discussion Memorandum.
Topic No. 8--universal service: quality of service. Prior to the
PAEA, the services of the Postal Service were not subject to service
standards that defined the percentage of items that must be delivered
within specified periods after posting. Although the PAEA required the
Postal Service to adopt such service standards, these standards are not
the same as an externally defined USO requirement because they are
devised by the Postal Service and subject to revision by the Postal
Service. On the other hand, the PAEA did, for the first time, require
the Postal Service to introduce external measurement of performance
under these service standards (or an internal measurement approved by
the Commission). In the European Union (EU), the regulator is typically
required to both (1) establish quality of service standards, and (2)
ensure independent monitoring of performance. Specific questions
related to this topic can be found in the Discussion Memorandum.
Topic No. 9--methods of calculating the cost of the universal
service obligation and postal and mailbox monopolies. The PAEA and
implementing regulations issued by the Commission introduced a modern
system of rate regulation. Under the PAEA, the Commission is not
scheduled to conduct an overall review of the modern system of
regulation insofar as it applies to market dominant products until
2016. 39 U.S.C. 3622(d)(3). Nonetheless, a revision of the USO and/or
monopoly laws could imply modifications to recently adopted procedures
for regulation of rates. Commenters are invited to provide any views
and analyses with respect to such economic relationships. Specific
questions related to this topic can be found in the Discussion
Memorandum.
Topic No. 10--the implications of the universal service obligation
for the postal monopoly. Section 702(a)(2)(D) of the PAEA requires the
Commission's report to include ``the scope and standards of universal
service and the postal monopoly likely to be required in the future in
order to meet the needs and expectations of the * * * public * * * .''
In addition, section 702(b) requires the Commission to provide the
estimated effects of any recommended changes to universal service and
the postal monopoly, as well as an analysis of the likely benefit of
the current postal monopoly to the Postal Service to sustain the
current scope and standards of universal service.
Previous topics identified in this notice have focused on the
implications of the postal monopoly and mailbox monopoly for the
universal service obligation.\4\ This topic focuses on the implications
of the universal service obligation for the postal and mailbox
monopolies. In addressing this topic, commenters should discuss how
their conception of the universal service obligation would affect the
need for, and parameters of, the postal monopoly and mailbox monopoly.
Specific questions related to this topic can be found in the Discussion
Memorandum.
---------------------------------------------------------------------------
\4\ See Topic No. 2 (the history, development, and evolution of
the universal service obligation and the postal monopoly); Topic No.
4 (the effect of the postal monopoly on the range of universal
service product offerings); Topic No. 5 (the role of the mailbox
monopoly in supporting universal service and the universal service
obligation); Topic No. 6 (the implication of the postal monopoly for
the frequency of delivery of universal services); Topic No. 7 (the
relationship between the monopoly laws and rates for universal
service); and Topic No. 9 (the relationship between benefits and
costs of the postal monopoly, the mailbox monopoly, and the
universal service obligation).
---------------------------------------------------------------------------
Topic No. 11--universal service, the universal service obligation
and the postal monopoly in other countries. Commenters are invited to
provide any views and analyses of the evolution of universal service,
the USO, and the postal monopoly in other industrialized countries and
to comment upon the possible relevance, or lack of relevance, of such
examples for the current study. Specific questions related to this
topic can be found in the Discussion Memorandum.
Topic No. 12-other issues. Commenters are invited to provide any
views and analyses on subjects not covered by the preceding topic
headings, including, for example, views and/or analyses on broader
social, economic, and technological trends that may affect the future
needs and expectations of society generally with respect to universal
service in 3 years, 5 years, 10 years, and 15 years. Specific questions
related to this topic can be found in the Discussion Memorandum.
Commenters are reminded that if the Commission recommends any
changes to universal service and the postal monopoly, the Commission
must provide estimated effects of each recommendation on the service,
financial condition, rates, and security of mail provided by the Postal
Service. Those recommending changes would assist the Commission if they
also provide information on these effects.
IV. Sources of Information
This section provides a brief guide to sources of additional
information about universal postal service, the USO, and monopoly laws
for commenters who are not familiar with these topics. The following
discussion focuses on selected official proceedings and reports
prepared for U.S. and foreign government agencies that are readily
accessible in English. Within these proceedings and reports, readers
will find references to the far richer array of academic studies and
advocacy papers that illuminate the issues presented by the present
study.
Four earlier Commission proceedings appear to address issues
related to the present proceeding. In Regulations Implementing Private
Express Statutes, Docket No. RM76-4 (1976), the Commission concluded
that the postal laws did not at that time grant the Commission
jurisdiction over regulations defining the postal monopoly. In Monopoly
Theory Inquiry, Docket No. RM89-4 (1989), the Commission concluded a
general inquiry into the economics of the postal monopoly and issued a
lengthy report on its findings. Records of these proceedings may be
found in the archives section of the Commission's Internet site. In
addition, the Commission has recently initiated two public inquiries
related to service standards for market dominant universal services. In
Service Standards and Performance Measurement for Market Dominant
Products, Docket No. PI2007-1 (2007), the Commission developed comments
on service standards proposed by the Postal Service. In Service
Performance Measurement Systems For Market Dominant Products, Docket
No. PI2008-1 (ongoing), the Commission is reviewing service performance
measurement procedures proposed by the Postal Service.
Commission staff and subcontractors for the Commission have also
prepared several papers on the economics of universal service and the
postal monopoly. These are posted on the Commission's Internet site
under ``Speeches and Papers, Papers, PRC Staff.'' Professor Richard B.
Kielbowicz prepared a study on the history of universal postal service
under contract with the Commission; it can be found under ``Speeches
and Papers, Papers, Kielbowicz.'' More generally, the Commission's
Internet site includes a wealth of legislative histories, judicial
decisions, and economic data pertaining to the period after enactment
of the Postal Reorganization Act of 1970 (PRA).
Other U.S. governmental analyses of universal service and the
postal monopoly include the following: in
[[Page 23510]]
2003, the President's Commission on the United States Postal Service
undertook an extensive review of postal policy in the United States;
much of the analyses, testimonies, and studies prepared for the
President's Commission bear directly on issues presented by the current
study.\5\ The General Accounting Office has prepared many reports on
postal service and postal policy; two of these specifically address the
monopoly laws: Postal Service Reform Issues Relevant to Changing
Restrictions on Private Letter Delivery (1996) (2 volumes), and U.S.
Postal Service: Information About Restrictions on Mailbox Access
(1997). In 1973, the Board of Governors of the Postal Service issued a
report on the postal monopoly law, Statutes Restricting Private
Carriage of Mail and Their Administration, required by the PRA.\6\ The
Postal Service also offers a history of the postal service in the
United States on its Internet site.\7\
---------------------------------------------------------------------------
\5\ See https://www.treasury.gov/offices/domestic-finance/usps
for the final report and documents of the Commission.
\6\ Also reprinted in House Comm. on Post Office and Civil
Service, 93d Cong., 1st Sess., Comm. Print No. 93-5 (1973).
\7\ See https://www.usps.com/postalhistory/welcome.htm.
---------------------------------------------------------------------------
Outside the United States, several governments have undertaken
official inquiries similar to the present study. In particular,
PostCom, the postal regulator in the United Kingdom, has conducted
extensive consultations into the appropriate scope of universal service
and the need for the postal monopoly. Documents posted on PostCom's
Internet site include detailed economic and legal analyses, although it
should be noted that postal laws in the United Kingdom differ
significantly from those in the United States.\8\ The Commission of the
EU has also contracted for, and posted on, the Internet numerous
analyses of universal service, the postal monopoly, and economics of
postal services.\9\ In Australia, the National Competition Council
issued a detailed review of the postal law in 1989, Review of the
Australian Postal Corporation Act.\10\ In New Zealand, a lively account
of postal reform is provided by Vivienne Smith, Reining in the
Dinosaur: The Remarkable Turnaround of New Zealand Post (1989), a book
published by New Zealand Post and available from Internet book sellers.
---------------------------------------------------------------------------
\8\ See https://www.psc.gov.uk/universal-service/defining-the-
universal-service.html and https://www.psc.gov.uk/policy-and-
consultations/consultations/market-opening-timetable.html.
\9\ See https://ec.europa.eu/internal--market/post/studies--
en.htm for a list of all postal studies prepared for the European
Commission.
\10\ See https://www.ncc.gov.au/index.asp under ``Communications,
Australia Post.''
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V. Public Representative
Section 505 of title 39 requires the designation of an officer of
the Commission in all public proceedings to represent the interests of
the general public. The Commission hereby designates Emmett Rand
Costich to serve as the Public Representative, representing the
interests of the general public. Pursuant to this designation, he will
direct the activities of Commission personnel assigned to assist him
and, will, upon request, provide their names for the record. Neither he
nor any of the assigned personnel will participate in or provide advice
on any Commission decision in this proceeding.
VI. Discussion Memorandum for Use in Preparing Comments on Universal
Postal Service and the Postal Monopoly Laws
Section 702 of the PAEA requires the Postal Regulatory Commission
to prepare a report on ``universal postal service and the postal
monopoly in the United States * * * including the monopoly on the
delivery of mail and on access to mailboxes.'' Public Law 109-435,
Sec. 702, 120 Stat. 3198, 3243. This report on universal postal
service and the postal monopoly laws is to be submitted to Congress and
the President by December 19, 2008.
The purpose of this memorandum is to stimulate discussion by
identifying a number of topics and specific questions that commenters
may wish to address. The list of topics and questions is not intended
to exclude commenters from presenting views or opinions on other topics
or issues.\11\
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\11\ The views set forth in this section do not necessarily
reflect the opinions or positions of the Commission or any
individual Commissioner.
---------------------------------------------------------------------------
A. Topic No. 1: Scope of ``Universal Postal Service'' and ``Universal
Service Obligation''
1. Topic No. 1.1: ``Universal Postal Service''
At the beginning of the 21st century, it is readily apparent that
the United States is served by a national system of collection and
delivery services that is ``universal'' in many respects. Almost every
person in every corner of the country can send a letter or document or
parcel to almost anyone in every corner of the country and expect the
addressee to receive the letter, document, or parcel. Indeed, in many
cases, the sender may choose among different price/service options
offered by the Postal Service and private delivery services. Which of
these services should be regarded as ``universal services'' and which
should be regarded as non-universal delivery services? Are only
services offered by the Postal Service to be considered ``universal
services'' despite the national reach of several private delivery
services individually and the network of private delivery services
collectively? Put differently, should an evaluation of the ``needs and
expectations of the United States public'' consider only services
provided by the Postal Service? Indeed, considering the Postal Service
alone, are all its services ``universal services'' or only some?
``Universal service'' does not appear at all in the U.S. Code. Nor
does the PAEA separately define ``universal service.'' The PAEA uses
``universal service'' in only two places, neither is included in the
U.S. Code; the section requiring a study of universal service and the
postal monopoly (section 702) and the section requiring a study of the
future business model of the Postal Service (section 710). Nonetheless,
for purposes of the current report, the term ``universal service'' must
be defined in some manner and that definition must be consistent with
the requirements of section 702 of the PAEA and the intent of Congress
in requiring this report.
The text of the PAEA is one potential starting point for
interpreting the term ``universal service.'' Section 702 employs
``universal service'' or ``universal postal service'' nine times. From
its context, ``universal service'' could be characterized by scope and
constrained by legal standards set out in current laws, including
rules, regulations, policy statements, and/or practices of the Postal
Service. ``Universal service'' may be said to ``cover'' geographic
areas and/or groups of persons, and some areas or groups may be said to
be not now covered by universal service. An obligation to provide
``universal service'' may result in costs for the Postal Service.
Section 710, the only other provision of the PAEA to refer to
``universal service,'' uses the phrase twice, most significantly in
reference to ``continued availability of affordable, universal postal
service throughout the United States.''
Sections 101 and 403 of the U.S. Code can also be read to provide
standards for ``universal service.'' A review of these two sections
suggests ``universal service'' could be read to refer to a postal
service or set of postal services that is characterized by several
features or service elements that are attained to such a degree or in
such a manner that postal service may be considered
[[Page 23511]]
``universal.'' Together sections 101 and 403 identify service elements
and the level of attainment which could be used to define a ``universal
service'':
a. Geographic scope. ``Universal service'' provides services
``throughout the United States'' (section 403(a)) that serve ``all
areas'' and ``all communities'' (section 101(a)), especially rural
areas (section 101(b)) and ``as nearly as practicable the entire
population of the United States'' (section 403(b)(1)) and also provides
services to or from military personnel abroad (section 403(a)).
b. Range of products. ``Universal service'' transmits a range of
postal items including ``written and printed matter, parcels, and like
materials'' (section 403(a)) suited to ``the needs of different
categories of mail and mail users'' (section 403(b)(2)).
c. Access facilities. ``Universal service'' provides mailers
``ready access'' to the postal system through an appropriate level of
post offices and other access facilities ``consistent with reasonable
economies'' (section 403(b)(3)), especially in rural areas (section
101(b)).
d. Delivery services. ``Universal service'' provides for the
receipt, transmission, and delivery of postal items (section 403(a)).
e. Rates and affordability of service. ``Universal service''
charges prices that are fair, reasonable (section 403(a)), non-
discriminatory (section 403(c)), and based on a ``fair and equitable''
apportionment of costs (section 101(d)).
f. Quality of service. ``Universal service'' provides for the
prompt, reliable, efficient (section 101(a)), and adequate (section
403(a)) transmission of postal items, with particular attention to the
``most expeditious'' transmission of letters (section 101(e)).
Such a six-pronged concept of universal service would appear to be
fully consistent with the manner in which the term ``universal
service'' is used in section 702.
At a conceptual level, a proposed definition of ``universal
service'' may be similar to the concept of universal service formally
adopted in the EU. In the EU, the Postal Directive \12\ refers to
universal service as the ``permanent provision of a postal service of
specified quality at all points in their territory at affordable prices
for all users.'' The six service elements derived from sections 101 and
403 of the U.S. law seem to be reflected in the elements of universal
service described in the EU Postal Directive. The EU Postal Directive
includes a seventh service element, users' rights of complaint and
redress, which has no counterpart in sections 101 and 403. A broad
similarity in how the term ``universal service'' is used in the PAEA
and EU Postal Directive also appears to be plausible since it appears
possible that the postal reform debate in Europe in the late 1980s and
early 1990s led to use of the term ``universal service'' in the
somewhat later postal reform debates in the United States.
---------------------------------------------------------------------------
\12\ Directive 1997/67/EC of the European Parliament and of the
Council of 15 December 1997 on common rules for the development of
the internal market of community postal services and the improvement
of quality of service, OJ L 15, 21 Feb. 1998, p. 14, as amended by
Directive 2002/39/EC of the European Parliament and of the Council
of 10 June 2002 amending Directive 97/67/EC with regard to further
opening to competition of community postal services, OJ L176, 5 July
2002, p. 21 and Directive 2008/6/EC of the European Parliament and
of the Council of 20 February 2008 amending Directive 97/67/EC with
regard to the full accomplishment of the internal market of
community postal services, OJL 52, 27 February 2008, p. 3.
---------------------------------------------------------------------------
On the other hand, the six-pronged approach towards defining
``universal postal service'' described above does not include all of
the public service activities of the Postal Service nor all of the
characteristics of the postal services offered by the Postal Service.
This concept does not, for example, include the assistance that the
Postal Service provides to the Department of State in the processing of
passport applications (other than the provision of postal services for
such applications). Likewise, it does not include law enforcement
activities of the Postal Inspection Service. Such activities are
certainly ``public services,'' but they do not seem to be ``universal
postal service'' as that term is used in section 702 of the PAEA.\13\
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\13\ Section 3651(c) of title 39, added by the PAEA, appears to
draw a similar distinction when it refers to ``other public services
or activities which, in the judgment of the Postal Regulatory
Commission, would not otherwise have been provided by the Postal
Service but for the requirements of law.''
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Likewise, the foregoing approach to ``universal postal service''
would not include attributes of the Postal Service which are not
elements of the services actually provided the public. For example,
section 101 refers to at least two objectives of national postal policy
that are not included in the six-pronged approach described above: (1)
Fair conditions of employment (sections 101(c) and 101(g)), and (2) a
fair and equitable distribution of mail transportation contracts
(section 101(f)). While these goals affect the manner in which the
Postal Service operates, they do not seem to relate to the ``service''
provided to mailers and addressees. According to common usage, a
``service'' is the ``helping or doing work for someone else.'' \14\
Preliminarily, it would appear that the term ``universal service'' as
used in section 702 of the PAEA refers to services provided by the
Postal Service and not to non-service attributes of the Postal Service.
This view appears to be supported by a review of legislative history.
Committee reports leading to the PAEA treat universal service and
employment as separate issues. The U.S. House of Representatives report
refers to ``The legislation creates a modern system of rate regulation,
establishes fair competition rules and a powerful new regulator,
addresses the Postal Service's universal service obligation and the
scope of the mail monopoly, and institutes improvements to the
collective bargaining process.'' (Emphasis added.) H.R. Rept. No. 109-
66 (2005) at 43. Thus, the universal service obligation seems
distinguishable from the collective bargaining process. Likewise, the
U.S. Senate report refers to ``the basic features of universal
service--affordable rates, frequent delivery, and convenient community
access to retail postal services.'' S. Rept. No. 108-318 (2004) at 1.
Likewise, in Congressional debates, leaders in the preparation of the
PAEA also seemed to indicate an understanding that universal service
and employment practices were different matters of concern. See, e.g.,
152 Cong. Rec. H6512 (July 26, 2005) (remarks of Mr. T. Davis of
Virginia) (``For consumers it preserves universal service, maintains
high-quality standards, and eliminates unfair mailing costs so that
they have an affordable and reliable means of communication. For
workers it protects collective bargaining and offers whistleblower
protections that are needed to ensure safe employment.''); 152 Cong.
Rec. H6513 (July 26, 2005) (remarks of Mr. T. Davis of Virginia)
(``Universal service. First and foremost, the bill preserves the Postal
Service's commitment to universal service, the guaranteed delivery 6
days a week to each and every address in the United States.''); 152
Cong. Rec. H9179 (December 8, 2006) (remarks of Mr. Waxman of
California) (``This bill has many highlights. It provides for
ratemaking flexibility, rate stability, universal service, high quality
standards, and collective bargaining.''); 152 Cong. Rec. H9180
(December 8, 2006) (remarks of Mr. McHugh of New York) (``The universal
service mission of the Postal Service remained the same, as stated in
title 39 of the U.S. Code: `The Postal Service shall have as its basic
function
[[Page 23512]]
the obligation to provide postal services to bind the Nation together
through the personal, educational, literary, and business
correspondence of the people. It shall provide prompt, reliable, and
efficient services to patrons in all areas and shall render postal
services to all communities.''')
---------------------------------------------------------------------------
\14\ See The New Oxford American Dictionary 2001.
---------------------------------------------------------------------------
It should also be noted that although the foregoing definition of
``universal postal service'' and EU Postal Directive address similar
service elements, they differ significantly in the level of attainment
or manner of implementation. As a result, a broadly defined definition
of ``universal service,'' like the one set forth above, is quite
different from the more specifically defined definition of ``universal
service'' set out in the Postal Directive. For example, the EU
definition of ``universal service'' excludes express services and
parcel services for parcels weighing more than 20 kg. (44 pounds),
while section 702 makes no such distinction. Similarly, the EU
definition includes within the universal service area services provided
by private operators, whereas section 702 is unclear about the
applicability of the concept to private delivery services.
A working definition of universal service for purposes of the
study. In light of the preceding discussion, one possibility would be
for the Commission to use a working definition of universal service
like the following:
Universal service refers to a postal service or set of postal
services that is characterized by six features or service elements that
are attained to such a degree or in such a manner that postal service
may be considered ``universal.'' The six service elements are as
follows, and in each case the level or manner of attainment presently
considered characteristic of universal service are noted: (1)
Geographic scope. Universal service provides services throughout the
United States, serving all areas and all communities, especially rural
areas, and as nearly as practicable the entire population of the United
States and also providing service to or from military personnel abroad.
(2) Range of products. Universal service transmits a range of postal
items including written and printed matter, parcels, and like materials
suited to the needs of different categories of mail and mail users. (3)
Access. Universal service provides mailers ready access to the postal
system through an appropriate level of post offices and other access
facilities consistent with reasonable economies, for both urban and
rural areas. (4) Delivery services. Universal service provides for the
receipt, transmission, and delivery of postal items. (5) Rates and
affordability of service. Universal service charges prices that are
fair, reasonable, non-discriminatory, and based on a fair and equitable
apportionment of costs. (6) Quality of service. Universal service
provides for the prompt, reliable, efficient, and adequate transmission
of postal items, with particular attention to the most expeditious
transmission of letters.
Such a definition is self-evidently imprecise and open-ended in
several respects. Different observers could come to different
conclusions, such as when universal postal service was first attained
in the United States or whether the Postal Service presently provides
prompt, reliable, efficient, and adequate services in all cases or
serves as nearly as practicable the entire population of the United
States. This definition leaves unresolved whether private operators may
be considered to provide a portion of the universal service.
Nonetheless, this open-endedness would seem to be generally consistent
with the way the term ``universal service'' is used in the PAEA. Under
such a definition, ``universal service'' would refer to a general
concept and not to specific pattern of service.
Even if open-ended, such a working definition of ``universal
service'' (or an alternative) would offer guidance for the report
required by section 702 of the PAEA. For example, such a definition
would permit a determination of what aspects of national postal service
should be included in the ``history and development'' and ``scope and
standards'' of universal service. Guided by such a definition, the
study can focus on the history, development, standards, and future of
the six service elements identified and the concept of universal
service generally.
It bears emphasis that a working definition of ``universal postal
service'' is proposed only for the purposes of putting bounds on the
scope of the report required by section 702. The proposed definition
should not be interpreted as a proposal for a statutory definition of
``universal postal service,'' still less as a definition of the scope
of a ``universal service obligation'' (see next section).
Commenters should carefully consider the foregoing definition of
the concept of ``universal postal service'' and should comment on
whether this, or some other, definition should be used in preparing the
Commission's report. Questions that should be addressed include: What
factors should be included/excluded from the definition of ``universal
postal service?'' What specific statutory text, legislative history or
other considerations support the commenter's proposed definition of
``universal postal service''?
2. Topic No. 1.2: ``Universal Service Obligation''
The USO is a legal measure that guarantees availability of, in the
words of the EU Postal Directive, ``a universal postal service
encompassing a minimum range of services of specified quality to be
provided in all Member States at an affordable price for the benefit of
all users, irrespective of their geographical location.'' \15\ The USO
may take the form of a statutory command to government as a whole or to
its public postal operator. If government is the object of the USO,
then government will typically direct an independent postal regulator
or ministry to administer a licensing system that obliges one or more
postal operators to provide universal services.
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\15\ Directive 1997/67/EC, OJ L 15, 21 February 1998, p. 14,
Recital 11.
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The USO seeks to insure that a basic level of universal postal
services will be maintained. The USO does not have to be a set of
objectives for the services actually provided. For example, the scope
of universal postal service actually provided by the public postal
operator (and perhaps other postal operators obliged to provide
universal services) could exceed minimum standards set by a USO. For
example, in a given country, the USO might require a delivery to all
addresses at least five days per week, but the public postal operator
might deliver six days a week to some or all addresses because it
considers six-day service good business. Similarly, the USO might
require that at least 80 percent of postal items be delivered by the
end of the first business day after posting, whereas the public postal
operator might in fact deliver 90 percent of postal items within that
period. Viewed in this way, ``universal service'' would be an
operational concept, whereas ``universal service obligation'' would be
a legal concept.
It should be noted that the foregoing definition of the universal
service obligation would not include several things. While the Postal
Service was established by law to provide postal services to the nation
generally, it must supply these services in accordance with a host of
statutory requirements. According to the foregoing definition, however,
not all of these requirements would necessarily be ``universal
service'' requirements. Many requirements, for example, treatment of
employees according to certain governmental standards or standards with
respect to Federal contracting, do
[[Page 23513]]
not relate to the six service elements of universal service identified
in section 1. They would remain even if the Postal Service were not
obliged to provide universal service. Hence, such requirements,
although admittedly legal constraints imposed on the Postal Service,
would not be considered universal service requirements or part of the
universal service obligation. Nor would this approach include within
the concept of ``universal service obligation'' requirements which the
Postal Service imposes on itself. By its nature, an ``obligation''
seems to refer to an externally-imposed requirement.
The ``universal service obligation,'' if so defined, would include
all legal obligations imposed on the Postal Service relating to the six
service elements of universal service: the geographic scope of
services, the range of products, access facilities, delivery services,
level and structure of rates (including non-discrimination), and
quality of service. This definition of the USO would reach well beyond
the language of sections 101 and 403. Under current law, there are four
main sources of legal standards for universal postal service: the U.S.
Code, appropriations bills for the Postal Service, the Universal Postal
Convention, and regulations adopted by the Commission.
The U.S. Code includes numerous standards which relate the six
prongs of ``universal service'' as provided by the Postal Service. For
example, section 407 makes clear that universal service should include
collection and delivery of international mail as well as domestic mail.
On the other hand, the scope of universal service is limited by
sections 3001 to 3010, 3014, and 3015, which prohibit carriage of
certain non-mailable items, and section 3682, which places size and
weight limits on mailable matter. Section 3691 establishes standards
for quality of service. Several provisions of the U.S. Code regulate
rates. Section 404(c) requires uniform national rates for letters,
while section 3638 requires uniform rates for books and films. Sections
3403, 3404, 3626, and 3629 provide for free or reduced rates for
certain items. Sections 3621 to 3634 require the Postal Regulatory
Commission to control rates according to certain standards. Section
404(d) requires the Postal Service to follow certain procedures before
closure of post offices. Whatever net costs the Postal Service incurs
as a result of such legal restrictions might be properly considered
costs of the USO.
The annual appropriations bill for the Postal Service can affect
the provision of universal service in two ways. First, the amount of
money provided affects the scope of services that can be offered by the
Postal Service. Second, the appropriations bill may include substantive
provisions (called ``riders'') that direct how the Postal Service is to
spend the money appropriated. For example, in the 2006 postal
appropriations bill, Congress included two riders related to universal
service: (1) That six-day delivery and rural delivery of mail shall
continue at not less than the 1983 level; and (2) that none of the
funds provided in this Act shall be used to consolidate or close small
rural and other small post offices in fiscal year 2006.
In the Universal Postal Convention (2004), the United States agreed
with other member countries of the Universal Postal Union to provide
certain universal services under certain conditions until December 31,
2009. These commitments relate primarily to the geographic scope of
services, the quality of services, and the rates charged.
The Postal Regulatory Commission adopts regulations which create
standards for universal services, primarily in the area of rates and
accounting for the costs that underlie rates.
Commenters should consider the foregoing approach to the concept of
``universal service obligation'' as an interpretation of section 702 of
the PAEA. Other approaches can be considered as well. Commenters are
invited to address such questions as:
a. What specific legal provisions constitute a complete statement
of the current USO?
b. What should be included/excluded from the concept of USO?
c. What specific statutory text, legislative history, or other
basis exists to support a USO concept?
d. What is the precise scope of the postal monopoly under current
law?
e. What is the precise scope of the mailbox monopoly under current
law?
B. Topic No. 2--Historical Development of Universal Service, the USO,
and Monopoly Laws
Specific questions regarding the historical development of
universal service, the USO, and monopoly laws which appear to be
relevant to the present study and which commenters may wish to address
include, but are not limited to, the following:
1. When were the specific provisions of the monopoly laws adopted?
In each case, what was the intent of Congress?
2. How has the precise scope of postal monopoly law changed over
the years?
3. How did the pattern of service provided by the Post Office
Department and later the Postal Service evolve into the present
universal service?
4. How did the legal authority of the Post Office Department and
later the Postal Service develop with respect to the six service
elements of universal service?
5. How and when did the general concept of a USO evolve?
6. How are the monopoly laws and USO related historically?
7. How has use of universal services changed over the last five
years, both in terms of volumes and mail mix?
8. What have been the major factors influencing demand for
universal services over the last five years both in terms of volumes
and mail mix?
9. What has been the effect of the Internet on demand?
C. Topic No. 3--Universal Service: Geographic Scope
Specific questions regarding the geographic scope of universal
service and the postal monopoly which appear to be relevant to the
present study and which commenters may wish to address include, but are
not limited to, the following:
1. What geographic areas, populations, communities, organizations,
or other groups or entities, if any, are not currently covered by the
USO identified above?
2. What other gaps or deficiencies, if any, exist in the current
USO? For example, a commenter may consider that the current USO fails
to address a subject that should be addressed or sets a standard
inappropriately.
3. What geographic areas, populations, communities, organizations,
or other groups or entities, if any, are currently receiving universal
services that are deficient in some manner? How should the word
``deficient'' be interpreted in this context?
D. Topic No. 4--Universal Service: Range of Product Offerings
Specific questions regarding the range of product offerings which
appear to be relevant to the present study and which commenters may
wish to address (either in terms of their own experience or in terms of
their views regarding the needs of others) include, but are not limited
to, the following:
1. What postal products should be legally assured service by a USO?
What products should be supplied according to normal market
arrangements between mailers and sellers of postal services?
2. Should express services be covered by the USO? Advertisements?
First-Class Mail such as statements and invoices? Bulk First-Class
[[Page 23514]]
advertisements? Single-Piece First-Class Mail? Personal correspondence
only? Newspapers and magazines? Bulk parcels? Single-piece parcels?
Competitive products generally? With respect to each product covered by
the USO, what public policies require coverage of that product?
3. How does the postal monopoly affect the range of universal
service product offerings?
4. How should the postal monopoly affect the range of universal
service product offerings?
5. Should universal service include special services such as
Registered Mail, Certified Mail, and insurance for some or all
universal services (as in the EU)? Should the USO require provision of
such special services?
6. Should universal service include a lower priority, lower priced
alternative for the delivery of letters (as in the United Kingdom and
many other countries)? Should the USO require introduction of such a
``second priority'' letter service?
7. For parcels, is there an appropriate weight limit for the USO?
8. In the case of each product, what special considerations, if
any, support inclusion or exclusion of the international postal
products?
9. How should changes in mail volumes and mail mix over the next 3,
5, 10, or 15 years affect the USO?
10. To what extent, if any, should the universal service obligation
permit the Postal Service (and/or other operators engaged in provision
universal service) to expand or contract the geographic scope of
universal service compared to that presently served by the Postal
Service?
E. Topic No. 5--Universal Service: Access to Postal Facilities and
Services
Questions regarding access to postal facilities and services which
appear to be relevant to the present study and which commenters may
wish to address (either in terms of their own experience or in terms of
their views regarding the needs of others) include, but are not limited
to, the following:
1. To what extent will the need for access facilities (including
post offices, contract post offices, and collection boxes) expand or
contract in 3 years, 5 years, 10 years, and 15 years?
2. What types of transactions require mailers to come to a post
office in order to post a postal item? To what extent will changing
technologies modify the demand for such retail services in 3 years, 5
years, 10 years, and 15 years?
3. What types of transactions require mailers to come to a post
office in order to receive postal items? To what extent will changing
technologies modify the demand for such services in 3 years, 5 years,
10 years, and 15 years?
4. To what extent do contract post offices (i.e., stores providing
postal services operated by non-USPS personnel) serve as satisfactory
substitutes for USPS post offices? Under what circumstances do they
not?
5. To what extent should access facilities be assured by inclusion
in a universal service obligation in 3 years, 5 years, 10 years, and 15
years? To what extent should USO access requirements, if any, apply
differently to different universal service products?
6. To what extent should the Postal Service be permitted by the USO
to substitute contract post offices for USPS post offices? \16\
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\16\ In some countries, like the United Kingdom, more than 90
percent of post offices are contract post offices.
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7. To what extent should the USO in the future (i.e., in 3 years, 5
years, 10 years, and 15 years) require delivery to each address in the
nation (as in the EU)?
8. To what extent should the USO in the future (i.e., in 3 years, 5
years, 10 years, and 15 years) include requirements for delivery of
postal items to persons without an address? \17\
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\17\ See, e.g., Currier v. Potter, 379 F.3d 716 (9th Cir. 2004)
in which the court upheld an order by the Postal Service denying
homeless individuals no-fee postal mailboxes and refused to provide
them general delivery service anywhere but a at main, downtown post
office.
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9. Does the mailbox monopoly still serve a useful role in
supporting universal service and the universal service obligation?
10. What changes, if any, should be made to the mailbox monopoly to
enhance the ability of mailers to reach mail recipients or to broaden
the range of services available to mail recipients?
F. Topic No. 6--Universal Service: Frequency of Delivery Commenters Are
Invited To Comment on Their Anticipated Needs and Expectations With
Respect to Frequency of Universal Services
1. What are the major factors that influence the needs and
expectations of mailers with respect to delivery frequency?
2. What are the major factors that influence the needs and
expectations of addressees with respect to delivery frequency?
3. To what extent would it be appropriate for universal service in
the future (i.e., in 3 years, 5 years, 10 years, and 15 years) to
provide for a delivery frequency of 7, 6, 5, 4, 3, or 2 days per week,
i.e., more or less than currently provided by the Postal Service?
4. To what extent should the legal standards set out in the USO
permit a delivery frequency of 7, 6, 5, 4, 3, or 2 days per week, i.e.,
more or less than currently provided by the Postal Service?
5. To what extent would it be appropriate for universal service in
the future (i.e., in 3 years, 5 years, 10 years, and 15 years) to vary
delivery frequency by the volume and characteristics of mail, by, for
example, providing more frequent delivery for letters than for
advertisements or more frequent delivery in areas that receive high
volumes of mail than in areas that receive low volumes of mail?
6. To what extent should the legal standards set out in the USO
permit universal service in the future to vary delivery frequency by
the volume and characteristics of mail?
7. To what extent would mailers be interested in a discount service
that provides less than six days per week? To what extent would mailers
be interested in a higher priced service that includes Sunday delivery?
8. What implications, if any, does the postal monopoly have for the
frequency of delivery of universal services?
G. Topic No. 7--Universal Service Obligation: Rates and Affordability
of Service
1. Should the USO in the future (i.e., 3 years, 5 years, 10 years,
and 15 years) require that rates for universal service are
``affordable'' (as in the EU)? To what extent should affordability
assurances, if any, apply differently to different universal service
products? How should ``affordable'' be defined?
2. Should the USO in the future (i.e., 3 years, 5 years, 10 years,
and 15 years) require that rates for universal services are not unduly
or unreasonably discriminatory (see 39 U.S.C. 403(c))? To what extent
should such prohibitions, if any, apply differently to different
universal service products?
3. Should the USO in the future (i.e., 3 years, 5 years, 10 years,
and 15 years) require that increases in rates for market dominant
universal services are limited to increases in the Consumer Price Index
applied at the class level (see 39 U.S.C. 3622)? To what extent should
such controls apply differently to different market dominant universal
service products?
4. To what extent, if at all, should the USO in the future (i.e., 3
years, 5 years, 10 years, and 15 years) regulate rates for personal
correspondence or single-piece postal items in a different manner from
[[Page 23515]]
regulation of rates for bulk market dominant products? \18\
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\18\ For example, in the United Kingdom, PostCom has grouped
market dominant products into two baskets for purposes of
administering price caps. The first basket includes ``captive''
single-piece items, and the second basket includes ``non-captive''
bulk items. See PostCom, 2006 Royal Mail Price and Service Quality
Review: Initial Proposals (June 2005) at paras. 3.24 et seq.
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5. To what extent, if at all, should the USO in the future (i.e., 3
years, 5 years, 10 years, and 15 years) require that rates for each
class of mail for the transmission of letters be uniform throughout the
United States (see 39 U.S.C. 404(c))?
6. To what extent, if at all, should the USO in the future (i.e., 3
years, 5 years, 10 years, and 15 years) permit introduction of rates
for market dominant bulk mail that vary according to the cost of
delivery? According to the costs of transportation from origin? For
example, for bulk mail, the Postal Service might charge more for
delivery in high-cost areas and less for the delivery in low-cost
areas.\19\
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\19\ Bulk mail rates that vary by cost of delivery are becoming
accepted in the European Union. For a discussion of policy
implicatio
