Administrative Practice and Procedure; Postal Service, 41265-41268 [E8-16031]

Download as PDF Federal Register / Vol. 73, No. 139 / Friday, July 18, 2008 / Rules and Regulations Effective date: August 18, 2008. U.S. Army Corps of Engineers, ATTN: CECW–CO (David B. Olson), 441 G Street, NW., Washington, DC 20314–1000. FOR FURTHER INFORMATION CONTACT: Mr. David Olson, Headquarters, Operations and Regulatory Community of Practice, Washington, DC, at (202) 761–4922, Mr. Scott Jones, Corps of Engineers, Wilmington District, Regulatory Branch, at (202) 761–7763, or Ms. Tracey Wheeler, Corps of Engineers, Wilmington District, Regulatory Branch, at (252) 975–1616. SUPPLEMENTARY INFORMATION: In the April 25, 2007, issue of the Federal Register (72 FR 20460), the Corps published a proposed rule to designate an existing rifle range fan as a danger zone. The proposed danger zone is within an existing restricted area that was established in 1951 (16 FR 2578) and amended in 1997 (62 FR 17553). In response to the April 25, 2007, proposed rule, no comments were received. Pursuant to its authorities in section 7 of the Rivers and Harbors Act of 1917 (40 Stat. 266; 33 U.S.C. 1) and Chapter XIX of the Army Appropriations Act of 1919 (40 Stat. 892; 33 U.S.C. 3), the Corps amends 33 CFR 334.430 by adding a danger zone along the Neuse River as described below. The regulations governing the existing restricted area have not been changed. DATES: ADDRESSES: a. Review Under Executive Order 12866 This rule is issued with respect to a military function of the Defense Department and the provisions of Executive Order 12866 do not apply. rwilkins on PROD1PC63 with RULES b. Review Under the Regulatory Flexibility Act This rule has been reviewed under the Regulatory Flexibility Act (Pub. L. 96– 354) which requires the preparation of a regulatory flexibility analysis for any regulation that will have a significant economic impact on a substantial number of small entities (i.e., small businesses and small governments). The Corps has determined that the establishment of this danger zone will have practically no economic impact on the public, result in no anticipated navigational hazard, and will not interfere with existing waterway traffic. This rule will have no significant economic impact on small entities. c. Review Under the National Environmental Policy Act Due to the administrative nature of this action and because there is no intended change in the use of the area, 16:19 Jul 17, 2008 d. Unfunded Mandates Act This rule does not impose an enforceable duty on the private sector and, therefore, it is not a Federal private sector mandate and it is not subject to the requirements of either section 202 or section 205 of the Unfunded Mandates Act. We have also found under section 203 of the Act that small governments will not be significantly and uniquely affected by this rulemaking. List of Subjects in 33 CFR Part 334 Danger zones, Marine safety, Navigation (water), Restricted areas, Waterways. I For the reasons set out in the preamble, the Corps amends 33 CFR part 334, as follows: PART 334—DANGER ZONE AND RESTRICTED AREA REGULATIONS 1. The authority citation for part 334 continues to read as follows: I Authority: 40 Stat. 266 (33 U.S.C. 1) and 40 Stat. 892 (33 U.S.C. 3). Procedural Requirements VerDate Aug<31>2005 the Corps determined that this regulation will not have a significant impact to the quality of the human environment and, therefore, preparation of an environmental impact statement will not be required. An environmental assessment has been prepared. The environmental assessment may be reviewed at the District office listed at the end of FOR FURTHER INFORMATION CONTACT, above. Jkt 214001 I 2. Revise § 334.430 to read as follows: § 334.430 Neuse River and tributaries at Marine Corps Air Station Cherry Point, North Carolina; restricted area and danger zone. (a) The restricted area. That portion of Neuse River within 500 feet of the shore along the reservation of the Marine Corps Air Station, Cherry Point, North Carolina, extending from the mouth of Hancock Creek to a point approximately 6,800 feet west of the mouth of Slocum Creek, and all waters of Hancock and Slocum Creeks and their tributaries within the boundaries of the reservation. (b) The danger zone. The waters within an area beginning at latitude 34.923425° N, longitude ¥76.853222° W; thence northeasterly across Hancock Creek to latitude 34.925258° N, longitude ¥76.849864° W; continuing northeasterly to latitude 34.933382° N, longitude ¥76.835081° W; thence northwesterly to the Neuse River shoreline at latitude 34.936986° N, longitude ¥76.841197° W, continuing northwesterly to latitude 34.943275° N, longitude ¥76.852169° W; thence PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 41265 southwesterly along the shorelines to latitude 34.935111° N, longitude ¥76.859078° W; thence southeasterly along Hancock Creek shoreline to the point of origin. (c) The regulations. (1) Except in cases of extreme emergency, all persons or vessels, other than those operated by the United States Navy or United States Coast Guard, are prohibited from entering the restricted area without prior permission of the enforcing agency. (2) Entry points into the danger zone will be prominently marked with signage indicating the boundary of the danger zone. (3) Firing will take place both day and night at irregular periods throughout the year. Appropriate warnings will be issued through official government and civilian channels serving the region. Such warnings will specify the time and duration of operations and give such other pertinent information as may be required in the interest of safety. Upon completion of firing or if the scheduled firing is cancelled for any reason, the warning signals marking the danger zone will be removed. (4) Except as otherwise provided in this section the danger zone will be open to general public access. Vessels, watercraft, and other vehicles may proceed through the danger zone. (5) The regulation in this section shall be enforced by the Commanding Officer, Marine Corps Air Station Cherry Point, North Carolina, and/or persons or agencies as he/she may designate. Dated: July 11, 2008. James R. Hannon, Jr., Acting Chief, Operations, Directorate of Civil Works. [FR Doc. E8–16454 Filed 7–17–08; 8:45 am] BILLING CODE 3710–92–P POSTAL REGULATORY COMMISSION 39 CFR Part 3020 [Docket No. CP2008–7; Order No. 84] Administrative Practice and Procedure; Postal Service Postal Regulatory Commission. Direct final rule. AGENCY: ACTION: SUMMARY: The Commission is adding the Postal Service’s negotiated agreement with China Post Group to the competitive product list. This action is consistent with changes in a recent law governing postal operations. Republication of the lists of market dominant and competitive products is also consistent with new requirements in the law. E:\FR\FM\18JYR1.SGM 18JYR1 41266 Federal Register / Vol. 73, No. 139 / Friday, July 18, 2008 / Rules and Regulations Effective July 18, 2008. Related Postal Service filings due July 23, 2008. FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 202–789–6820 or stephen.sharfman@prc.gov. DATES: On May 20, 2008, the Postal Service filed notice, pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5, of the Governors’ decision establishing prices for competitive products not of general applicability for Inbound Express Mail International (EMS).1 The Postal Service’s filing, docketed as Docket No. CP2008–6, includes supporting material, including the Governors’ decision, filed under seal. Concurrently, the Postal Service filed notice, pursuant to 39 CFR 3015.5, of a specific negotiated service agreement covering Inbound EMS prices.2 This filing, docketed as Docket No. CP2008–7, includes the contract and supporting materials filed under seal. On June 3, 2008, the Commission issued Order No. 79, which determined that Docket No. CP2008–6 establishes, in essence, a shell classification, while Docket No. CP2008–7 is a specific agreement negotiated pursuant to the conditions of the shell classification. Given this interrelationship, the Commission consolidated the proceedings for purposes of review under Docket No. CP2008–7.3 In Order No. 79, the Commission also reiterated its position that each negotiated service agreement will initially be classified as a separate product, while acknowledging the possibility of grouping functionally equivalent agreements as a single product if they exhibit similar cost and market characteristics. Id. at 2–3. This, in effect, invoked the filing and review requirements of 39 CFR part 3020, subpart B, along with the requirements of rule 3015.5 for competitive products. On June 10, 2008, the Postal Service filed material responsive to questions posed in Order No. 79, and material responsive to 39 CFR part 3020, subpart B.4 The material responsive to 39 CFR rwilkins on PROD1PC63 with RULES SUPPLEMENTARY INFORMATION: 1 Notice of United States Postal Service of Governors’ Decision on Inbound Prices Under Express Mail International (EMS) Bilateral/ Multilateral Agreements, May 20, 2008 (Notice). 2 Notice of United States Postal Service of Filing an Agreement for Inbound Express Mail International (EMS) Prices, May 20, 2008 (Pricing Notice). 3 PRC Order No. 79, Notice and Order Concerning Prices Under Express Mail International Bilateral/ Multilateral Agreements, June 3, 2008 at 2 (Order No. 79). 4 United States Postal Service Response to Order No. 79 and Notice of Filing Information Responsive to Part 3020 of the Commission’s Rules of Practice VerDate Aug<31>2005 16:19 Jul 17, 2008 Jkt 214001 part 3020, subpart B included a statement of supporting justification sponsored by Pranab Shah. See Postal Service Response, Attachment A. The Commission previously proposed, at a minimum, identifying each international mail agreement with foreign posts involving competitive products (both in the Mail Classification Schedule and in other documents generated by the Commission) by the name(s) of the foreign post(s), the mail product(s) involved, and the agreement’s expiration date. Order No. 79 at 3–4. In this instance, the Postal Service did not object to this proposal. Postal Service Response at 3. The Commission also noted that it has made no determination as to whether the portions of the agreement in Docket No. CP2008–7 that relate to outbound mail are subject to its review. Order No. 79 at 3. The Postal Service reiterated its position that an ‘‘outbound EMS agreement with China Post Group would no more need to be classified as a product or otherwise subjected to Commission review than would an agreement to purchase trucking services from highway contractors or to purchase air transportation from air carriers.’’ Postal Service Response at 3. Order No. 79 also provided an opportunity for public comment on the Postal Service’s proposals. Comments were received from the Public Representative (an employee of the Commission assigned to represent the interests of the general public) and United Parcel Service.5 Neither the Public Representative nor United Parcel Service expressed opposition to the China Post Group agreement. The Public Representative concludes that the China Post Group agreement ‘‘complies with the legal requirements for cost coverage and contribution to the Postal Service’s institutional costs.’’ Public Representative Comments at 4. United Parcel Service supports the Commission’s conclusion that this initial agreement be treated as a new product. UPS Comments at 2. It also suggests that because private carriers face more onerous customs and brokerage requirements than the Postal Service, the market for international package delivery and expedited services is less competitive than is often and Procedure, June 10, 2008 (Postal Service Response). 5 Public Representative Comments in Response to United States Postal Service Notice of Negotiated Service Agreement (NSA) for Inbound Express Mail International (EMS) with China Post (Public Representative Comments); Comments of United Parcel Service in Response to Order Concerning Prices Under Express Mail International Bilateral/ Multilateral Agreements (UPS Comments); both filed June 16, 2008. PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 assumed. Id. Both the Public Representative and United Parcel Service discuss issues encompassing the provision of materials under seal. Public Representative Comments at 2–3; UPS Comments at 1. Commission analysis. The statutory responsibility of the Commission, in this instance, is to assign a new product to either the market dominant list or the competitive product list. 39 U.S.C. 3642. As part of this responsibility, the Commission also will preliminarily review the proposal for compliance with the requirements of the Postal Accountability and Enhancement Act (PAEA) of 2006. For proposed competitive products, this includes review of the provisions applicable to rates for competitive products. 39 U.S.C. 3633. The Postal Service contends that adding the shell classification as a product will improve the Postal Service’s competitive posture. It argues that this can be accomplished while allowing verification that each agreement covers attributable costs, does not result in subsidization of competitive products by market dominant products, and increases contribution from competitive products. Alternatively, adding the individual agreement as a product also will improve the competitive posture of the Postal Service, but to a lesser degree. Postal Service Response, Attachment A, at 2. The Commission has reviewed the financial analysis provided under seal that accompanies the agreement and finds that the China Post Group agreement should cover its attributable costs (39 U.S.C. 3633(a)(2)), should not lead to the subsidization of competitive products by market dominant products (39 U.S.C. 3633(a)(1)), and should have a positive effect on the collective competitive products ability to provide their appropriate share of institutional costs (39 U.S.C. 3633(a)(3)).6 Thus, a preliminary review of the agreement indicates that it comports with the 6 The Commission notes that the Postal Service derived inflation adjustment factors from two point estimates for a 21-month period, September 2007 to May 2009, rather than June 2008 to May 2009, which coincides with the duration of the bilateral agreement. The Commission also notes that the estimate of the total unit cost of inbound Express Mail from China Post Group is based upon an estimate of the unit cost of domestic mail processing that represents an average of the domestic mail processing cost of inbound Express Mail from all countries rather than the average unit domestic mail processing cost for transition system countries. These observations did not have a significant impact on the overall analysis; however, the rationale for a 21-month period and the use of an average should be explained when filing future similar agreements. E:\FR\FM\18JYR1.SGM 18JYR1 Federal Register / Vol. 73, No. 139 / Friday, July 18, 2008 / Rules and Regulations provisions applicable to rates for competitive products. In determining whether to assign the China Post Group agreement as a product to the market dominant product list or the competitive product list the Commission must consider whether: rwilkins on PROD1PC63 with RULES * * * the Postal Service exercises sufficient market power that it can effectively set the price of such product substantially above costs, raise prices significantly, decrease quality, or decrease output, without risk of losing a significant level of business to other firms offering similar products. 39 U.S.C. 3642(b)(1). If this is the case, the product will be categorized as market dominant. The competitive category of products shall consist of all other products. The Commission is further required to consider the availability and nature of enterprises in the private sector engaged in the delivery of the product, the views of those that use the product, and the likely impact on small business concerns. 39 U.S.C. 3642(b)(3). The Postal Service asserts that its bargaining position is constrained by the existence of other shippers who can provide similar services. Thus, the market precludes the Postal Service from taking unilateral action to increase prices or decrease service without the risk of losing volume to private companies in the international shipping industry. Postal Service Response, Attachment A, at 2–3. The Postal Service contends that private consolidators and freight forwarders may offer international arrangements under similar conditions. Id. at 3. The Postal Service has no specific data on the views of those that use the products on the regulatory classification. Id. at 4. Finally, the Postal Service states that large shippers serve the market under consideration, and that there should be little impact upon small business other than adding an additional option for shipping articles to the United States. Id. The Commission previously assigned Inbound International Expedited Services to the competitive product list.7 The Postal Service contends that the China Post Group agreement falls within the Inbound International Expedited Services heading. The Commission has not received public opposition to the proposed regulatory classification during the comment period. Having considered the statutory requirements, the argument put forth by the Postal Service, and the public comment, the Commission finds that the 7 PRC Order No. 43, Order Establishing Ratemaking Regulations for Market Dominant and Competitive Products, October 29, 2008, para. 3019. VerDate Aug<31>2005 16:19 Jul 17, 2008 Jkt 214001 China Post Group agreement is appropriately categorized as a competitive product and should be added to the competitive product list. The revisions to the competitive product list are shown below the signature of this order, and shall become effective upon publication in the Federal Register. Mail Classification Schedule. The Postal Service previously proposed applicable draft Mail Classification Schedule language governing Inbound Express Mail International Services (EMS).8 Attachment A to the Governors’ decision filed in Docket No. CP2008–6 repeats this language. These proposals suggest assigning the China Post Group agreement to the Express Mail, Inbound Express Mail International category. In Docket Nos. CP2008–4, CP2008–5, CP2008–8, CP2008–9, and CP2008–10, the Postal Service’s draft Mail Classification Schedule language proposes to assign the associated agreements to the Negotiated Service Agreements, Outbound International category. The intent of the overall Negotiated Service Agreements category is to organize all negotiated agreements. Thus, the categorization in the instant docket does not appear to be consistent with the other proposals. The Commission invites the Postal Service to share its thoughts and concerns on development of a consistent approach to organizing competitive product negotiated agreements within the Mail Classification Schedule. The Postal Service’s proposed Mail Classification Schedule language indicates that other negotiated agreements may exist within Inbound Express Mail International: Bilateral Express Mail Service (EMS); EMS Cooperative Pay for Performance; Kahala Posts Group; European Parcel Group; and China Post Group. The Commission does not have specific information on the negotiated agreements for these products. The Postal Service shall provide the Commission with a list of ongoing agreement names, and expiration dates separated by product, along with a copy of each agreement.9 Providing this information will aid the Commission in understanding the Postal Service’s product offerings, and enhance the transparency of the Postal Service to the mailing community. 8 See United States Postal Service Submission of Additional Mail Classification Schedule Information in Response to Order No. 43, November 20, 2007. 9 See 39 U.S.C. 407(d)(2). Agreements that fall outside of the defined product models also are to be provided. PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 41267 Updating the Mail Classification Schedule. The China Post Group agreement contains provisions for early termination and automatic renewal of the agreement. The Postal Service shall notify the Commission of an early termination no later than the date of termination. The Commission then will remove the agreement from the Mail Classification Schedule at the earliest possible opportunity. The Postal Service also shall notify the Commission of an automatic renewal of the agreement 15 days prior its occurrence. Otherwise, the Commission will assume that the contract has lapsed and remove the agreement from the Mail Classification Schedule without notice. Additional agreements. As of now, the China Post Group agreement represented by Inbound International Expedited Services 1 (CP2008–7) in the competitive product list may be considered the same entity. In the future, the Postal Service may enter into other agreements substantially similar to the China Post Group agreement. When this occurs, Inbound International Expedited Services 1 (CP2008–7) will be considered the product and the included individual agreements will be treated as price categories under the product.10 If the Postal Service determines that it has entered into an agreement substantially equivalent to the China Post Group agreement with another country, it may file such an agreement using the abbreviated requirements provided by rule 3015.5. In each case, the individual agreement must be filed with the Commission, and each agreement must meet the requirements of 39 U.S.C. 3633. The Postal Service shall identify all significant differences between the new agreement and the preexisting product group. Such differences would include terms and conditions that impose new obligations or new requirements on any party to the agreement. The Commission will verify whether or not the second agreement is in fact substantially equivalent. Agreements that are not substantially equivalent will continue to have to meet the filing requirements provided by 39 CFR part 3020, subpart B. If this approach proves too cumbersome, alternative approaches may be considered. Confidentiality of information. The Commission is aware that the treatment of information as confidential is a sensitive issue. The Postal Service, the Public Representative, and United Parcel Service all express valid concerns 10 This may require future modification of the China Post Group descriptive language. E:\FR\FM\18JYR1.SGM 18JYR1 41268 Federal Register / Vol. 73, No. 139 / Friday, July 18, 2008 / Rules and Regulations that the Commission will address in the future on a broader level. In this docket, the Commission will take a limited first step to add transparency and facilitate the process of reviewing future agreements of this style. The Commission has reviewed the Governor’s decision supporting the request provided as required by rule 3020.31(b), and has determined that most of the document does not pose a risk of competitive harm if disclosed. In fact, the Postal Service disclosed similar information associated with Docket Nos. CP2008–8, CP2008–9, and CP2008–10. The Postal Service is directed to file a redacted version of the Governor’s decision provided under seal in Docket No. CP2008–6.11 It is Ordered: 1. The China Post Group agreement is added as a product not of general applicability to the competitive product list under Inbound International Expedited Services as Inbound International Expedited Services 1 (CP2008–7). 2. The Postal Service shall provide the Commission with suggestions regarding the development of a consistent approach to organizing competitive product negotiated agreements within the Mail Classification Schedule by July 23, 2008. 3. The Postal Service shall file with the Commission a list of all ongoing Inbound International Expedited Services agreements and expiration dates separated by product, along with a copy of each agreement, by July 23, 2008. 4. The Postal Service shall file with the Commission a redacted version of the Governors’ decision provided under seal in Docket No. CP2008–6 by July 23, 2008. 5. The Secretary shall arrange for publication of this order in the Federal Register. By the Commission. Issued: June 27, 2008. Steven W. Williams, Secretary. List of Subjects in 39 CFR Part 3020 rwilkins on PROD1PC63 with RULES Administrative practice and procedure; Postal Service. I For the reasons stated in the preamble, under the authority at 39 U.S.C. 503, the Postal Regulatory Commission amends 39 CFR part 3020 as follows: 11 The redacted version should be filed under Docket No. MC2008–7. The Commission anticipates the redacted version will be similar in nature to what the Postal Service provided associated with Docket Nos. CP2008–8, CP2008–9, and CP2008–10 on June 16, 2008. VerDate Aug<31>2005 16:19 Jul 17, 2008 Jkt 214001 1. The authority citation for part 3020 continues to read as follows: I Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682. 2. In Appendix A to Subpart A of Part 3020 revise sections 1000 and 2000 to read as follows: I Appendix A to Subpart A of Part 3020—Mail Classification Schedule Part A—Market Dominant Products 1000 Market Dominant Product List First-Class Mail Single-piece Letters/Postcards Bulk Letters/Postcards Flats Parcels Outbound Single-Piece First-Class Mail International Inbound Single-Piece First-Class Mail International Standard Mail (Regular and Nonprofit) High Density and Saturation Letters High Density and Saturation Flats/Parcels Carrier Route Letters Flats Not Flat-Machinables (NFMs)/Parcels Periodicals Within County Periodicals Outside County Periodicals Package Services Single-Piece Parcel Post Inbound Surface Parcel Post (at UPU rates) Bound Printed Matter Flats Bound Printed Matter Parcels Media Mail/Library Mail Special Services Ancillary Services International Ancillary Services Address List Services Caller Service Change-of-Address Credit Card Authentication Confirm International Reply Coupon Service International Business Reply Mail Service Money Orders Post Office Box Service Premium Forwarding Service (Experiment) Negotiated Service Agreements Discover Financial Services Negotiated Service Agreement Bank One Negotiated Service Agreement HSBC North America Holdings Inc. Negotiated Service Agreement Bookspan Negotiated Service Agreement 1001 Market Dominant Product Descriptions * * * * * Part B—Competitive Products 2000 Competitive Product List Express Mail Express Mail Outbound International Expedited Services Inbound International Expedited Services Inbound International Expedited Services 1 (CP2008–7) Priority Mail Priority Mail Outbound Priority Mail International Inbound Air Parcel Post Parcel Select PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 Parcel Return Service International International Priority Airlift (IPA) International Surface Airlift (ISAL) International Direct Sacks—M-Bags Global Customized Shipping Services Inbound Surface Parcel Post (at non-UPU rates) International Money Transfer Service International Ancillary Services Negotiated Service Agreements Domestic Outbound International * * * * * [FR Doc. E8–16031 Filed 7–17–08; 8:45 am] BILLING CODE 7710–FW–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R03–OAR–2007–1120; FRL–8693–5] Approval and Promulgation of Air Quality Implementation Plans; Maryland; Reasonably Available Control Technology Requirements for Marine Vessel and Barge Loading Environmental Protection Agency (EPA). ACTION: Final rule. AGENCY: SUMMARY: EPA is approving a State Implementation Plan (SIP) revision submitted by the State of Maryland. This revision establishes and requires reasonably available control technology (RACT) for the control of volatile organic compound (VOC) emissions from marine vessel and barge loading. EPA is approving this SIP revision in accordance with the Clean Air Act (CAA). DATES: Effective Date: This final rule is effective on August 18, 2008. ADDRESSES: EPA has established a docket for this action under Docket ID Number EPA–R03–OAR–2007–1120. All documents in the docket are listed in the http://www.regulations.gov Web site. Although listed in the electronic docket, some information is not publicly available, i.e., confidential business information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through http://www.regulations.gov or in hard copy for public inspection during normal business hours at the Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania E:\FR\FM\18JYR1.SGM 18JYR1

Agencies

[Federal Register Volume 73, Number 139 (Friday, July 18, 2008)]
[Rules and Regulations]
[Pages 41265-41268]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16031]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3020

[Docket No. CP2008-7; Order No. 84]


Administrative Practice and Procedure; Postal Service

AGENCY: Postal Regulatory Commission.

ACTION: Direct final rule.

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SUMMARY: The Commission is adding the Postal Service's negotiated 
agreement with China Post Group to the competitive product list. This 
action is consistent with changes in a recent law governing postal 
operations. Re-publication of the lists of market dominant and 
competitive products is also consistent with new requirements in the 
law.

[[Page 41266]]


DATES: Effective July 18, 2008. Related Postal Service filings due July 
23, 2008.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6820 or stephen.sharfman@prc.gov.

SUPPLEMENTARY INFORMATION: On May 20, 2008, the Postal Service filed 
notice, pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5, of the 
Governors' decision establishing prices for competitive products not of 
general applicability for Inbound Express Mail International (EMS).\1\ 
The Postal Service's filing, docketed as Docket No. CP2008-6, includes 
supporting material, including the Governors' decision, filed under 
seal. Concurrently, the Postal Service filed notice, pursuant to 39 CFR 
3015.5, of a specific negotiated service agreement covering Inbound EMS 
prices.\2\ This filing, docketed as Docket No. CP2008-7, includes the 
contract and supporting materials filed under seal.
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    \1\ Notice of United States Postal Service of Governors' 
Decision on Inbound Prices Under Express Mail International (EMS) 
Bilateral/Multilateral Agreements, May 20, 2008 (Notice).
    \2\ Notice of United States Postal Service of Filing an 
Agreement for Inbound Express Mail International (EMS) Prices, May 
20, 2008 (Pricing Notice).
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    On June 3, 2008, the Commission issued Order No. 79, which 
determined that Docket No. CP2008-6 establishes, in essence, a shell 
classification, while Docket No. CP2008-7 is a specific agreement 
negotiated pursuant to the conditions of the shell classification. 
Given this interrelationship, the Commission consolidated the 
proceedings for purposes of review under Docket No. CP2008-7.\3\
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    \3\ PRC Order No. 79, Notice and Order Concerning Prices Under 
Express Mail International Bilateral/Multilateral Agreements, June 
3, 2008 at 2 (Order No. 79).
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    In Order No. 79, the Commission also reiterated its position that 
each negotiated service agreement will initially be classified as a 
separate product, while acknowledging the possibility of grouping 
functionally equivalent agreements as a single product if they exhibit 
similar cost and market characteristics. Id. at 2-3. This, in effect, 
invoked the filing and review requirements of 39 CFR part 3020, subpart 
B, along with the requirements of rule 3015.5 for competitive products.
    On June 10, 2008, the Postal Service filed material responsive to 
questions posed in Order No. 79, and material responsive to 39 CFR part 
3020, subpart B.\4\ The material responsive to 39 CFR part 3020, 
subpart B included a statement of supporting justification sponsored by 
Pranab Shah. See Postal Service Response, Attachment A.
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    \4\ United States Postal Service Response to Order No. 79 and 
Notice of Filing Information Responsive to Part 3020 of the 
Commission's Rules of Practice and Procedure, June 10, 2008 (Postal 
Service Response).
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    The Commission previously proposed, at a minimum, identifying each 
international mail agreement with foreign posts involving competitive 
products (both in the Mail Classification Schedule and in other 
documents generated by the Commission) by the name(s) of the foreign 
post(s), the mail product(s) involved, and the agreement's expiration 
date. Order No. 79 at 3-4. In this instance, the Postal Service did not 
object to this proposal. Postal Service Response at 3.
    The Commission also noted that it has made no determination as to 
whether the portions of the agreement in Docket No. CP2008-7 that 
relate to outbound mail are subject to its review. Order No. 79 at 3. 
The Postal Service reiterated its position that an ``outbound EMS 
agreement with China Post Group would no more need to be classified as 
a product or otherwise subjected to Commission review than would an 
agreement to purchase trucking services from highway contractors or to 
purchase air transportation from air carriers.'' Postal Service 
Response at 3.
    Order No. 79 also provided an opportunity for public comment on the 
Postal Service's proposals. Comments were received from the Public 
Representative (an employee of the Commission assigned to represent the 
interests of the general public) and United Parcel Service.\5\ Neither 
the Public Representative nor United Parcel Service expressed 
opposition to the China Post Group agreement.
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    \5\ Public Representative Comments in Response to United States 
Postal Service Notice of Negotiated Service Agreement (NSA) for 
Inbound Express Mail International (EMS) with China Post (Public 
Representative Comments); Comments of United Parcel Service in 
Response to Order Concerning Prices Under Express Mail International 
Bilateral/Multilateral Agreements (UPS Comments); both filed June 
16, 2008.
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    The Public Representative concludes that the China Post Group 
agreement ``complies with the legal requirements for cost coverage and 
contribution to the Postal Service's institutional costs.'' Public 
Representative Comments at 4. United Parcel Service supports the 
Commission's conclusion that this initial agreement be treated as a new 
product. UPS Comments at 2. It also suggests that because private 
carriers face more onerous customs and brokerage requirements than the 
Postal Service, the market for international package delivery and 
expedited services is less competitive than is often assumed. Id. Both 
the Public Representative and United Parcel Service discuss issues 
encompassing the provision of materials under seal. Public 
Representative Comments at 2-3; UPS Comments at 1.
    Commission analysis. The statutory responsibility of the 
Commission, in this instance, is to assign a new product to either the 
market dominant list or the competitive product list. 39 U.S.C. 3642. 
As part of this responsibility, the Commission also will preliminarily 
review the proposal for compliance with the requirements of the Postal 
Accountability and Enhancement Act (PAEA) of 2006. For proposed 
competitive products, this includes review of the provisions applicable 
to rates for competitive products. 39 U.S.C. 3633.
    The Postal Service contends that adding the shell classification as 
a product will improve the Postal Service's competitive posture. It 
argues that this can be accomplished while allowing verification that 
each agreement covers attributable costs, does not result in 
subsidization of competitive products by market dominant products, and 
increases contribution from competitive products. Alternatively, adding 
the individual agreement as a product also will improve the competitive 
posture of the Postal Service, but to a lesser degree. Postal Service 
Response, Attachment A, at 2.
    The Commission has reviewed the financial analysis provided under 
seal that accompanies the agreement and finds that the China Post Group 
agreement should cover its attributable costs (39 U.S.C. 3633(a)(2)), 
should not lead to the subsidization of competitive products by market 
dominant products (39 U.S.C. 3633(a)(1)), and should have a positive 
effect on the collective competitive products ability to provide their 
appropriate share of institutional costs (39 U.S.C. 3633(a)(3)).\6\ 
Thus, a preliminary review of the agreement indicates that it comports 
with the

[[Page 41267]]

provisions applicable to rates for competitive products. In determining 
whether to assign the China Post Group agreement as a product to the 
market dominant product list or the competitive product list the 
Commission must consider whether:

    \6\ The Commission notes that the Postal Service derived 
inflation adjustment factors from two point estimates for a 21-month 
period, September 2007 to May 2009, rather than June 2008 to May 
2009, which coincides with the duration of the bilateral agreement. 
The Commission also notes that the estimate of the total unit cost 
of inbound Express Mail from China Post Group is based upon an 
estimate of the unit cost of domestic mail processing that 
represents an average of the domestic mail processing cost of 
inbound Express Mail from all countries rather than the average unit 
domestic mail processing cost for transition system countries. These 
observations did not have a significant impact on the overall 
analysis; however, the rationale for a 21-month period and the use 
of an average should be explained when filing future similar 
agreements.
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* * * the Postal Service exercises sufficient market power that it 
can effectively set the price of such product substantially above 
costs, raise prices significantly, decrease quality, or decrease 
output, without risk of losing a significant level of business to 
other firms offering similar products.

39 U.S.C. 3642(b)(1). If this is the case, the product will be 
categorized as market dominant. The competitive category of products 
shall consist of all other products.
    The Commission is further required to consider the availability and 
nature of enterprises in the private sector engaged in the delivery of 
the product, the views of those that use the product, and the likely 
impact on small business concerns. 39 U.S.C. 3642(b)(3).
    The Postal Service asserts that its bargaining position is 
constrained by the existence of other shippers who can provide similar 
services. Thus, the market precludes the Postal Service from taking 
unilateral action to increase prices or decrease service without the 
risk of losing volume to private companies in the international 
shipping industry. Postal Service Response, Attachment A, at 2-3. The 
Postal Service contends that private consolidators and freight 
forwarders may offer international arrangements under similar 
conditions. Id. at 3. The Postal Service has no specific data on the 
views of those that use the products on the regulatory classification. 
Id. at 4. Finally, the Postal Service states that large shippers serve 
the market under consideration, and that there should be little impact 
upon small business other than adding an additional option for shipping 
articles to the United States. Id.
    The Commission previously assigned Inbound International Expedited 
Services to the competitive product list.\7\ The Postal Service 
contends that the China Post Group agreement falls within the Inbound 
International Expedited Services heading. The Commission has not 
received public opposition to the proposed regulatory classification 
during the comment period. Having considered the statutory 
requirements, the argument put forth by the Postal Service, and the 
public comment, the Commission finds that the China Post Group 
agreement is appropriately categorized as a competitive product and 
should be added to the competitive product list. The revisions to the 
competitive product list are shown below the signature of this order, 
and shall become effective upon publication in the Federal Register.
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    \7\ PRC Order No. 43, Order Establishing Ratemaking Regulations 
for Market Dominant and Competitive Products, October 29, 2008, 
para. 3019.
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    Mail Classification Schedule. The Postal Service previously 
proposed applicable draft Mail Classification Schedule language 
governing Inbound Express Mail International Services (EMS).\8\ 
Attachment A to the Governors' decision filed in Docket No. CP2008-6 
repeats this language. These proposals suggest assigning the China Post 
Group agreement to the Express Mail, Inbound Express Mail International 
category. In Docket Nos. CP2008-4, CP2008-5, CP2008-8, CP2008-9, and 
CP2008-10, the Postal Service's draft Mail Classification Schedule 
language proposes to assign the associated agreements to the Negotiated 
Service Agreements, Outbound International category. The intent of the 
overall Negotiated Service Agreements category is to organize all 
negotiated agreements. Thus, the categorization in the instant docket 
does not appear to be consistent with the other proposals. The 
Commission invites the Postal Service to share its thoughts and 
concerns on development of a consistent approach to organizing 
competitive product negotiated agreements within the Mail 
Classification Schedule.
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    \8\ See United States Postal Service Submission of Additional 
Mail Classification Schedule Information in Response to Order No. 
43, November 20, 2007.
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    The Postal Service's proposed Mail Classification Schedule language 
indicates that other negotiated agreements may exist within Inbound 
Express Mail International: Bilateral Express Mail Service (EMS); EMS 
Cooperative Pay for Performance; Kahala Posts Group; European Parcel 
Group; and China Post Group. The Commission does not have specific 
information on the negotiated agreements for these products. The Postal 
Service shall provide the Commission with a list of ongoing agreement 
names, and expiration dates separated by product, along with a copy of 
each agreement.\9\ Providing this information will aid the Commission 
in understanding the Postal Service's product offerings, and enhance 
the transparency of the Postal Service to the mailing community.
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    \9\ See 39 U.S.C. 407(d)(2). Agreements that fall outside of the 
defined product models also are to be provided.
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    Updating the Mail Classification Schedule. The China Post Group 
agreement contains provisions for early termination and automatic 
renewal of the agreement. The Postal Service shall notify the 
Commission of an early termination no later than the date of 
termination. The Commission then will remove the agreement from the 
Mail Classification Schedule at the earliest possible opportunity. The 
Postal Service also shall notify the Commission of an automatic renewal 
of the agreement 15 days prior its occurrence. Otherwise, the 
Commission will assume that the contract has lapsed and remove the 
agreement from the Mail Classification Schedule without notice.
    Additional agreements. As of now, the China Post Group agreement 
represented by Inbound International Expedited Services 1 (CP2008-7) in 
the competitive product list may be considered the same entity. In the 
future, the Postal Service may enter into other agreements 
substantially similar to the China Post Group agreement. When this 
occurs, Inbound International Expedited Services 1 (CP2008-7) will be 
considered the product and the included individual agreements will be 
treated as price categories under the product.\10\
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    \10\ This may require future modification of the China Post 
Group descriptive language.
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    If the Postal Service determines that it has entered into an 
agreement substantially equivalent to the China Post Group agreement 
with another country, it may file such an agreement using the 
abbreviated requirements provided by rule 3015.5. In each case, the 
individual agreement must be filed with the Commission, and each 
agreement must meet the requirements of 39 U.S.C. 3633. The Postal 
Service shall identify all significant differences between the new 
agreement and the pre-existing product group. Such differences would 
include terms and conditions that impose new obligations or new 
requirements on any party to the agreement. The Commission will verify 
whether or not the second agreement is in fact substantially 
equivalent. Agreements that are not substantially equivalent will 
continue to have to meet the filing requirements provided by 39 CFR 
part 3020, subpart B. If this approach proves too cumbersome, 
alternative approaches may be considered.
    Confidentiality of information. The Commission is aware that the 
treatment of information as confidential is a sensitive issue. The 
Postal Service, the Public Representative, and United Parcel Service 
all express valid concerns

[[Page 41268]]

that the Commission will address in the future on a broader level.
    In this docket, the Commission will take a limited first step to 
add transparency and facilitate the process of reviewing future 
agreements of this style. The Commission has reviewed the Governor's 
decision supporting the request provided as required by rule 
3020.31(b), and has determined that most of the document does not pose 
a risk of competitive harm if disclosed. In fact, the Postal Service 
disclosed similar information associated with Docket Nos. CP2008-8, 
CP2008-9, and CP2008-10. The Postal Service is directed to file a 
redacted version of the Governor's decision provided under seal in 
Docket No. CP2008-6.\11\
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    \11\ The redacted version should be filed under Docket No. 
MC2008-7. The Commission anticipates the redacted version will be 
similar in nature to what the Postal Service provided associated 
with Docket Nos. CP2008-8, CP2008-9, and CP2008-10 on June 16, 2008.
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    It is Ordered:
    1. The China Post Group agreement is added as a product not of 
general applicability to the competitive product list under Inbound 
International Expedited Services as Inbound International Expedited 
Services 1 (CP2008-7).
    2. The Postal Service shall provide the Commission with suggestions 
regarding the development of a consistent approach to organizing 
competitive product negotiated agreements within the Mail 
Classification Schedule by July 23, 2008.
    3. The Postal Service shall file with the Commission a list of all 
ongoing Inbound International Expedited Services agreements and 
expiration dates separated by product, along with a copy of each 
agreement, by July 23, 2008.
    4. The Postal Service shall file with the Commission a redacted 
version of the Governors' decision provided under seal in Docket No. 
CP2008-6 by July 23, 2008.
    5. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.

    Issued: June 27, 2008.
Steven W. Williams,
Secretary.

List of Subjects in 39 CFR Part 3020

    Administrative practice and procedure; Postal Service.

0
For the reasons stated in the preamble, under the authority at 39 
U.S.C. 503, the Postal Regulatory Commission amends 39 CFR part 3020 as 
follows:

0
1. The authority citation for part 3020 continues to read as follows:


    Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.


0
2. In Appendix A to Subpart A of Part 3020 revise sections 1000 and 
2000 to read as follows:

Appendix A to Subpart A of Part 3020--Mail Classification Schedule

Part A--Market Dominant Products
1000 Market Dominant Product List
First-Class Mail
    Single-piece Letters/Postcards
    Bulk Letters/Postcards
    Flats
    Parcels
    Outbound Single-Piece First-Class Mail International
    Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
    High Density and Saturation Letters
    High Density and Saturation Flats/Parcels
    Carrier Route
    Letters
    Flats
    Not Flat-Machinables (NFMs)/Parcels
Periodicals
    Within County Periodicals
    Outside County Periodicals
Package Services
    Single-Piece Parcel Post
    Inbound Surface Parcel Post (at UPU rates)
    Bound Printed Matter Flats
    Bound Printed Matter Parcels
    Media Mail/Library Mail
Special Services
    Ancillary Services
    International Ancillary Services
    Address List Services
    Caller Service
    Change-of-Address Credit Card Authentication
    Confirm
    International Reply Coupon Service
    International Business Reply Mail Service
    Money Orders
    Post Office Box Service
    Premium Forwarding Service (Experiment)
Negotiated Service Agreements
    Discover Financial Services Negotiated Service Agreement
    Bank One Negotiated Service Agreement
    HSBC North America Holdings Inc. Negotiated Service Agreement
    Bookspan Negotiated Service Agreement
    1001 Market Dominant Product Descriptions
* * * * *
Part B--Competitive Products
2000 Competitive Product List
Express Mail
    Express Mail
    Outbound International Expedited Services
    Inbound International Expedited Services
    Inbound International Expedited Services 1 (CP2008-7)
Priority Mail
    Priority Mail
    Outbound Priority Mail International
    Inbound Air Parcel Post
Parcel Select
Parcel Return Service
International
    International Priority Airlift (IPA)
    International Surface Airlift (ISAL)
    International Direct Sacks--M-Bags
    Global Customized Shipping Services
    Inbound Surface Parcel Post (at non-UPU rates)
    International Money Transfer Service
    International Ancillary Services
Negotiated Service Agreements
    Domestic
    Outbound International
* * * * *

[FR Doc. E8-16031 Filed 7-17-08; 8:45 am]
BILLING CODE 7710-FW-P