Administrative Practice and Procedure, Postal Service, 78186-78189 [E8-30420]
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78186
Federal Register / Vol. 73, No. 246 / Monday, December 22, 2008 / Rules and Regulations
standards would be inconsistent with
applicable law or otherwise impractical.
Voluntary consensus standards are
technical standards (e.g., specifications
of materials, performance, design, or
operation; test methods; sampling
procedures; and related management
systems practices) that are developed or
adopted by voluntary consensus
standards bodies.
This rule does not use technical
standards. Therefore, we did not
consider the use of voluntary consensus
standards.
Environment
We have analyzed this rule under
Department of Homeland Security
Management Directive 5100.1 and
Commandant Instruction M16475.lD,
which guide the Coast Guard in
complying with the National
Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321–4370f), and
have concluded under the Instruction
that there are no factors in this case that
would limit the use of a categorical
exclusion under section 2.B.2 of the
Instruction. Therefore, this rule is
categorically excluded, under figure
2–1, paragraph (34)(g), of the
Instruction, from further environmental
documentation.
An environmental analysis checklist
and a categorical exclusion
determination are available in the
docket where indicated under
ADDRESSES.
List of Subjects in 33 CFR Part 165
Harbors, Marine safety, Navigation
(water), Reporting and recordkeeping
requirements, Security measures,
Waterways.
■ For the reasons discussed in the
preamble, the Coast Guard adopts the
interim rule published at 73 FR 28707,
May 19, 2008, as final without change.
Dated: November 18, 2008.
P. F. Thomas,
Captain, U.S. Coast Guard, Captain of the
Port Zone Jacksonville, Florida.
[FR Doc. E8–30387 Filed 12–19–08; 8:45 am]
BILLING CODE 4910–15–P
POSTAL REGULATORY COMMISSION
39 CFR Part 3020
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[Docket Nos. MC2009–12 and CP2009–14;
Order No. 149]
Administrative Practice and Procedure,
Postal Service
Postal Regulatory Commission.
Final rule.
AGENCY:
ACTION:
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SUMMARY: The Commission is adding
Express Mail and Priority Mail Contract
2 to the Competitive Product List. This
action is consistent with changes in a
recent law governing postal operations
and a recent Postal Service request.
Republication of the lists of market
dominant and competitive products is
also consistent with new requirements
in the law.
DATES: Effective December 22, 2008.
FOR FURTHER INFORMATION CONTACT:
Stephen L. Sharfman, General Counsel,
202–789–6820 and
stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION: Regulatory
History, 73 FR 74213 (December 5,
2008).
I. Background
The Postal Service seeks to add a new
product identified as Express Mail &
Priority Mail Contract 2 to the
Competitive Product List. For the
reasons discussed below, the
Commission approves the Request.
On November 25, 2008, the Postal
Service filed a formal request pursuant
to 39 U.S.C. 3642 and 39 CFR 3020.30
et seq. to add Express Mail & Priority
Mail Contract 2 to the Competitive
Product List.1 The Postal Service asserts
that the Express Mail & Priority Mail
Contract 2 product is a competitive
product ‘‘not of general applicability’’
within the meaning of 39 U.S.C.
3632(b)(3). This Request has been
assigned Docket No. MC2009–12.
The Postal Service
contemporaneously filed a contract
related to the proposed new product
pursuant to 39 U.S.C. 3632(b)(3) and 39
CFR 3015.5. The contract has been
assigned Docket No. CP2009–14.
In support of its Request, the Postal
Service filed the following materials: (1)
A redacted version of the Governors’
Decision authorizing the new product
which also includes an analysis of
Express Mail & Priority Mail Contract 2
and certification of the Governors’
vote; 2 (2) a redacted version of the
contract which, among other things,
provides that the contract will expire 3
years from the effective date, which is
proposed to be 1 day after the
Commission issues all regulatory
approvals; 3 (3) requested changes in the
Mail Classification Schedule product
1 Request of the United States Postal Service to
Add Express Mail & Priority Mail Contract 2 to
Competitive Product List and Notice of
Establishment of Rates and Class Not of General
Applicability, November 25, 2008 (Request).
2 Attachment A to the Request. The analysis that
accompanies the Governors’ Decision notes, among
other things, that the contract is not risk free, but
concludes that the risks are manageable.
3 Attachment B to the Request.
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list; 4 (4) a Statement of Supporting
Justification as required by 39 CFR
3020.32; 5 and (5) certification of
compliance with 39 U.S.C. 3633(a).6
In the Statement of Supporting
Justification, Kim Parks, Manager, Sales
and Communications, Expedited
Shipping, asserts that the service to be
provided under the contract will cover
its attributable costs, make a positive
contribution to coverage of institutional
costs, and will increase contribution
toward the requisite 5.5 percent of the
Postal Service’s total institutional costs.
Request, Attachment D, at 1. W. Ashley
Lyons, Manager, Corporate Financial
Planning, Finance Department, certifies
that the contract complies with 39
U.S.C. 3633(a). See id. Attachment E.
The Postal Service filed much of the
supporting materials, including the
unredacted Governors’ Decision and the
unredacted Express Mail & Priority Mail
Contract 2, under seal. In its Request,
the Postal Service maintains that the
contract and related financial
information, including the customer’s
name and the accompanying analyses
that provide prices, terms, conditions,
and financial projections, should remain
confidential. Id. at 2–3.
In Order No. 143, the Commission
gave notice of the two dockets,
appointed a public representative, and
provided the public with an opportunity
to comment.7
II. Comments
Comments were filed by the Public
Representative.8 No filings were
submitted by other interested parties.
The Public Representative states that the
Postal Service’s filing complies with
applicable Commission rules of practice
and procedure, and concludes that the
Express Mail & Priority Mail Contract 2
agreement comports with the
requirements of title 39. Public
Representative Comments at 4. He
further states that the agreement appears
beneficial to the general public. Id. at 1.
III. Commission Analysis
The Commission has reviewed the
Request, the contract, the financial
analysis provided under seal that
4 Attachment
C to the Request.
D to the Request.
6 Attachment E to the Request.
7 PRC Order No. 142, Notice and Order
Concerning Express Mail & Priority Mail Contract
2 Negotiated Service Agreement, December 2, 2008
(Order No. 143).
8 Public Representative Comments in Response to
United States Postal Service Request to Add
Express Mail & Priority Mail Contract 2 to
Competitive Product List and Notice of
Establishment of Rates and Class Not of General
Applicability, December 10, 2008 (Public
Representative Comments).
5 Attachment
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Federal Register / Vol. 73, No. 246 / Monday, December 22, 2008 / Rules and Regulations
accompanies it, and the comments filed
by the Public Representative.
Statutory requirements. The
Commission’s statutory responsibilities
in this instance entail assigning Express
Mail & Priority Mail Contract 2 to either
the Market Dominant Product List or to
the Competitive Product List. 39 U.S.C.
3642. As part of this responsibility, the
Commission also reviews the proposal
for compliance with the Postal
Accountability and Enhancement Act
(PAEA) requirements. This includes, for
proposed competitive products, a
review of the provisions applicable to
rates for competitive products. 39 U.S.C.
3633.
Product list assignment. In
determining whether to assign Express
Mail & Priority Mail Contract 2 as a
product to the Market Dominant
Product List or the Competitive Product
List, the Commission must consider
whether
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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 so, 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 who 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
precluding it from taking unilateral
action to increase prices without the
risk of losing volume to private
companies. Request, Attachment D,
paragraph (d). The Postal Service also
contends that it may not decrease
quality or output without risking the
loss of business to competitors that offer
similar expedited delivery services. Id.
It further states that the contract partner
supports the addition of the contract to
the Competitive Product List to
effectuate the negotiated contractual
terms. Id. at paragraph (g). Finally, the
Postal Service states that the market for
expedited delivery services is highly
competitive and requires a substantial
infrastructure to support a national
network. It indicates that large carriers
serve this market. Accordingly, the
Postal Service states that it is unaware
of any small business concerns that
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could offer comparable service for this
customer. Id. at paragraph (h).
No commenter opposes the proposed
classification of Express Mail & Priority
Mail Contract 2 as competitive. Having
considered the statutory requirements
and the support offered by the Postal
Service, the Commission finds that
Express Mail & Priority Mail Contract 2
is appropriately classified as a
competitive product and should be
added to the Competitive Product List.
Cost considerations. The Postal
Service’s financial analysis shows that
Express Mail & Priority Mail Contract 2
results in cost savings while ensuring
that the contract covers its attributable
costs, does not result in subsidization of
competitive products by market
dominant products, and increases
contribution from competitive products.
The contract is predicated on unit costs
for major mail functions, e.g., window
service, mail processing, and
transportation, based on the shipper’s
mail characteristics.
The Commission notes that in
evaluating costs under a prospective
contract compared to the average, the
Postal Service should take into account
all departures from average cost that
may be due to services provided under
the contract. The failure to do so, while
having no material effect on the
underlying financial analysis of the
contract in this instance, hampers the
timely review of the Postal Service’s
financial analysis. See also PRC Order
No. 138, November 20, 2008, at 6–7.
Based on the data submitted, the
Commission finds that Express Mail &
Priority Mail Contract 2 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 competitive products’
contribution to institutional costs (39
U.S.C. 3633(a)(3)). Thus, an initial
review of the proposed Express Mail &
Priority Mail Contract 2 indicates that it
comports with the provisions applicable
to rates for competitive products.
The Postal Service shall promptly
notify the Commission when the
contract terminates, but no later than
the actual termination date. The
Commission will then remove the
contract from the Mail Classification
Schedule at the earliest possible
opportunity.
In conclusion, the Commission
approves Express Mail & Priority Mail
Contract 2 as a new product. The
revision to the Competitive Product List
is shown below the signature of this
Order and is effective upon issuance of
this Order.
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78187
It is Ordered:
1. Express Mail & Priority Mail
Contract 2 (MC2009–12 and CP2009–14)
is added to the Competitive Product List
as a new product under Negotiated
Service Agreements, Domestic.
2. The Postal Service shall notify the
Commission of the termination date of
the contract as discussed in this Order.
3. The Secretary shall arrange for the
publication of this Order in the Federal
Register.
List of Subjects in 39 CFR Part 3020
Administrative practice and
procedure; Postal Service.
By the Commission.
Steven W. Williams,
Secretary.
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:
■
PART 3020—PRODUCT LISTS
1. The authority citation for part 3020
continues to read as follows:
■
Authority: 39 U.S.C. 503; 3622; 3631; 3642;
3682.
2. Revise Appendix A to subpart A of
part 3020—Mail Classification to read as
follows:
■
Appendix A to Subpart a of 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
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78188
Federal Register / Vol. 73, No. 246 / Monday, December 22, 2008 / Rules and Regulations
Confirm
International Reply Coupon Service
International Business Reply Mail Service
Money Orders
Post Office Box Service
Negotiated Service Agreements
HSBC North America Holdings Inc.
Negotiated Service Agreement
Bookspan Negotiated Service Agreement
Bank of America Corporation Negotiated
Service Agreement
The Bradford Group Negotiated Service
Agreement
Market Dominant Product Descriptions
First-Class Mail [Reserved for Class
Description]
Single-Piece Letters/Postcards [Reserved
for Product Description]
Bulk Letters/Postcards [Reserved for
Product Description]
Flats [Reserved for Product Description]
Parcels [Reserved for Product Description]
Outbound Single-Piece First-Class Mail
International [Reserved for Product
Description]
Inbound Single-Piece First-Class Mail
International [Reserved for Product
Description]
Standard Mail (Regular and Nonprofit)
[Reserved for Class Description]
High Density and Saturation Letters
[Reserved for Product Description]
High Density and Saturation Flats/Parcels
[Reserved for Product Description]
Carrier Route [Reserved for Product
Description]
Letters [Reserved for Product Description]
Flats [Reserved for Product Description]
Not Flat-Machinables (NFMs)/Parcels
[Reserved for Product Description]
Periodicals [Reserved for Class Description]
Within County Periodicals [Reserved for
Product Description]
Outside County Periodicals [Reserved for
Product Description]
Package Services [Reserved for Class
Description]
Single-Piece Parcel Post [Reserved for
Product Description]
Inbound Surface Parcel Post (at UPU rates)
[Reserved for Product Description]
Bound Printed Matter Flats [Reserved for
Product Description]
Bound Printed Matter Parcels [Reserved for
Product Description]
Media Mail/Library Mail [Reserved for
Product Description]
Special Services [Reserved for Class
Description]
Ancillary Services [Reserved for Product
Description]
Address Correction Service [Reserved for
Product Description]
Applications and Mailing Permits
[Reserved for Product Description]
Business Reply Mail [Reserved for Product
Description]
Bulk Parcel Return Service [Reserved for
Product Description]
Certified Mail [Reserved for Product
Description]
Certificate of Mailing [Reserved for Product
Description]
Collect on Delivery [Reserved for Product
Description]
Delivery Confirmation [Reserved for
Product Description]
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Insurance [Reserved for Product
Description]
Merchandise Return Service [Reserved for
Product Description]
Parcel Airlift (PAL) [Reserved for Product
Description]
Registered Mail [Reserved for Product
Description]
Return Receipt [Reserved for Product
Description]
Return Receipt for Merchandise [Reserved
for Product Description]
Restricted Delivery [Reserved for Product
Description]
Shipper-Paid Forwarding [Reserved for
Product Description]
Signature Confirmation [Reserved for
Product Description]
Special Handling [Reserved for Product
Description]
Stamped Envelopes [Reserved for Product
Description]
Stamped Cards [Reserved for Product
Description]
Premium Stamped Stationery [Reserved for
Product Description]
Premium Stamped Cards [Reserved for
Product Description]
International Ancillary Services [Reserved
for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail [Reserved for
Product Description]
International Return Receipt [Reserved for
Product Description]
International Restricted Delivery [Reserved
for Product Description]
Address List Services [Reserved for
Product Description]
Caller Service [Reserved for Product
Description]
Change-of-Address Credit Card
Authentication [Reserved for Product
Description]
Confirm [Reserved for Product Description]
International Reply Coupon Service
[Reserved for Product Description]
International Business Reply Mail Service
[Reserved for Product Description]
Money Orders [Reserved for Product
Description]
Post Office Box Service [Reserved for
Product Description]
Negotiated Service Agreements [Reserved for
Class Description]
HSBC North America Holdings Inc.
Negotiated Service Agreement [Reserved
for Product Description]
Bookspan Negotiated Service Agreement
[Reserved for Product Description]
Bank of America Corporation Negotiated
Service Agreement
The Bradford Group Negotiated Service
Agreement
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
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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)
Canada Post—United States Postal Service
Contractual Bilateral Agreement for
Inbound Competitive Services (MC2009–
8 and CP2009–9)
International Money Transfer Service
International Ancillary Services
Special Services
Premium Forwarding Service
Negotiated Service Agreements
Domestic
Express Mail Contract 1 (MC2008–5)
Express Mail Contract 2 (MC2009–3 and
CP2009–4)
Express Mail & Priority Mail Contract 1
(MC2009–6 and CP2009–7)
Express Mail & Priority Mail Contract 2
(MC2009–12 and CP2009–14)
Parcel Return Service Contract 1 (MC2009–
1 and CP2009–2)
Parcel Select & Parcel Return Service
Contract 1 (MC2009–11 and CP2009–13)
Priority Mail Contract 1 (MC2008–8 and
CP2008–26)
Priority Mail Contract 2 (MC2009–2 and
CP2009–3)
Priority Mail Contract 3 (MC2009–4 and
CP2009–5)
Priority Mail Contract 4 (MC2009–5 and
CP2009–6)
Outbound International
Global Expedited Package Services (GEPS)
Contracts
GEPS 1 (CP2008–5, CP2008–11, CP2008–
12, and CP2008–13, CP2008–18,
CP2008–19, CP2008–20, CP2008–21,
CP2008–22, CP2008–23, and CP2008–24)
Global Plus Contracts
Global Plus 1 (CP2008–9 and CP2008–10)
Global Plus 2 (MC2008–7, CP2008–16 and
CP2008–17)
Inbound Direct Entry Contracts with
Foreign Postal Administrations
(MC2008–6, CP2008–14 and CP2008–15)
Competitive Product Descriptions
Express Mail [Reserved for Group
Description]
Express Mail [Reserved for Product
Description]
Outbound International Expedited Services
[Reserved for Product Description]
Inbound International Expedited Services
[Reserved for Product Description]
Priority [Reserved for Product Description]
Priority Mail [Reserved for Product
Description]
Outbound Priority Mail International
[Reserved for Product Description]
Inbound Air Parcel Post [Reserved for
Product Description]
Parcel Select [Reserved for Group
Description]
Parcel Return Service [Reserved for Group
Description]
International [Reserved for Group
Description]
International Priority Airlift (IPA)
[Reserved for Product Description]
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Federal Register / Vol. 73, No. 246 / Monday, December 22, 2008 / Rules and Regulations
International Surface Airlift (ISAL)
[Reserved for Product Description]
International Direct Sacks—M-Bags
[Reserved for Product Description]
Global Customized Shipping Services
[Reserved for Product Description]
International Money Transfer Service
[Reserved for Product Description]
Inbound Surface Parcel Post (at non-UPU
rates) [Reserved for Product Description]
International Ancillary Services [Reserved
for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail [Reserved for
Product Description]
International Return Receipt [Reserved for
Product Description]
International Restricted Delivery [Reserved
for Product Description]
International Insurance [Reserved for
Product Description]
Negotiated Service Agreements [Reserved
for Group Description]
Domestic [Reserved for Product
Description]
Outbound International [Reserved for
Group Description]
Part C—Glossary of Terms and Conditions
[Reserved]
Part D—Country Price Lists for International
Mail [Reserved]
[FR Doc. E8–30420 Filed 12–19–08; 8:45 am]
BILLING CODE 7710–FW–P
POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2009–11 and CP2009–13;
Order No. 148]
New Domestic Mail Product
Postal Regulatory Commission.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Commission is adding
Parcel Select & Parcel Return Service
Contract 1 to the Competitive Product
List. This action is consistent with
changes in a recent law governing postal
operations and a recent Postal Service
request. Republication of the lists of
market dominant and competitive
products is also consistent with new
requirements in the law.
DATES: Effective December 22, 2008.
FOR FURTHER INFORMATION CONTACT:
Stephen L. Sharfman, General Counsel,
202–789–6820 and
stephen.sharfman@prc.gov.
Regulatory
History, 73 FR 74212 (December 5,
2008).
mstockstill on PROD1PC66 with RULES
SUPPLEMENTARY INFORMATION:
I. Background
The Postal Service seeks to add a new
product identified as Parcel Select &
Parcel Return Service Contract 1 to the
Competitive Product List. For the
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16:38 Dec 19, 2008
Jkt 217001
reasons discussed below, the
Commission approves the Request.
On November 25, 2008, the Postal
Service filed a formal request pursuant
to 39 U.S.C. 3642 and 39 CFR 3020.30
et seq. to add Parcel Select & Parcel
Return Service Contract 1 to the
Competitive Product List.1 The Postal
Service asserts that the Parcel Select &
Parcel Return Service Contract 1
product is a competitive product ‘‘not of
general applicability’’ within the
meaning of 39 U.S.C. 3632(b)(3). This
Request has been assigned Docket No.
MC2009–11.
The Postal Service
contemporaneously filed a contract
related to the proposed new product
pursuant to 39 U.S.C. 3632(b)(3) and 39
CFR 3015.5. The contract has been
assigned Docket No. CP2009–13.
In support of its Request, the Postal
Service filed the following materials: (1)
A redacted version of the Governors’
Decision authorizing the new product
which also includes an analysis of
Parcel Select & Parcel Return Service
Contract 1 and certification of the
Governors’ vote; 2 (2) a redacted version
of the contract which, among other
things, provides that the contract will
expire on May 31, 2011, and will
become effective 1 day after the
Commission issues all regulatory
approvals; 3 (3) requested changes in the
Mail Classification Schedule product
list; 4 (4) a Statement of Supporting
Justification as required by 39 CFR
3020.32; 5 and (5) certification of
compliance with 39 U.S.C. 3633(a).6
In the Statement of Supporting
Justification, Daniel J. Barrett, Acting
Manager, Product & Business
Development, Ground Shipping
Services, asserts that the service to be
provided under the contract will cover
its attributable costs, make a positive
contribution to coverage of institutional
costs, and will increase contribution
toward the requisite 5.5 percent of the
Postal Service’s total institutional costs.
Request, Attachment D, at 1. W. Ashley
Lyons, Manager, Corporate Financial
Planning, Finance Department, certifies
1 Request of the United States Postal Service to
Add Parcel Select & Parcel Return Service Contract
1 to Competitive Product List and Notice of
Establishment of Rates and Class Not of General
Applicability, November 25, 2008 (Request).
2 Attachment A to the Request. The analysis that
accompanies the Governors’ Decision notes, among
other things, that the agreement remains profitable
regardless of the discount level and results in a
positive contribution impact of the Postal Service
under all conditions.
3 Attachment B to the Request.
4 Attachment C to the Request.
5 Attachment D to the Request.
6 Attachment E to the Request.
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78189
that the contract complies with 39
U.S.C. 3633(a). See id. Attachment E.
The Postal Service filed much of the
supporting materials, including the
unredacted Governors’ Decision and the
unredacted contract, under seal. In its
Request, the Postal Service maintains
that the contract and related financial
information, including the customer’s
name and the accompanying analyses
that provide prices, terms, conditions,
and financial projections, should remain
confidential. Id. at 2–3.
In Order No. 142, the Commission
gave notice of the two dockets,
appointed a public representative, and
provided the public with an opportunity
to comment.7
II. Comments
Comments were filed by the Public
Representative and Newgistics, Inc.8
The Public Representative Comments
focus principally on the adequacy of
cost coverage, appropriate classification
of the product, and overall
transparency. Public Representative
Comments at 1–2. He concludes that the
agreement meets the important public
interest in adequate cost coverage and
believes the agreement is properly
classified as a competitive product. Id.
The Public Representative also raises
an issue with respect to transparency
and the method that the Postal Service
uses in this case to redact its filings. He
notes that the Commission’s rules
contemplate text-based pdf files where
possible. Id. at 5; accord 39 CFR
3001.10. Despite these minor caveats,
the Public Representative believes that
the Postal Service should be
commended for continuing to proceed
diligently toward accommodating
transparency concerns in a very
competitive business environment.
Newgistics’ comments focus on the
financial gain to the Postal Service. It
believes that the contract must
demonstrate that it will provide ‘‘new
volumes and revenues’’ to the Postal
Service. It wants to ensure that the
Postal Service does not take volume
from other postal mail service providers.
It notes that shifting mail from one
Postal Service customer to another does
not result in a contribution gain for the
Postal Service. Newgistics also contends
7 PRC Order No. 142, Notice and Order
Concerning Parcel Select Parcel Return Service
Contract 1 Negotiated Service Agreement, December
2, 2008 (Order No. 142).
8 Public Representative Comments in Response to
Order No. 142, December 10, 2008 (Public
Representative Comments); Response from Bill
Razzouk, Newgistics to Postal Regulatory
Commission Notice and Order Concerning Parcel
Select & Parcel Return Service Contract 1
Negotiated Service Agreement Order No. 142,
December 10, 2008 (Newgistics Comments).
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]]>Agencies
[Federal Register Volume 73, Number 246 (Monday, December 22, 2008)]
[Rules and Regulations]
[Pages 78186-78189]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-30420]
=======================================================================
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POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2009-12 and CP2009-14; Order No. 149]
Administrative Practice and Procedure, Postal Service
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Commission is adding Express Mail and Priority Mail
Contract 2 to the Competitive Product List. This action is consistent
with changes in a recent law governing postal operations and a recent
Postal Service request. Republication of the lists of market dominant
and competitive products is also consistent with new requirements in
the law.
DATES: Effective December 22, 2008.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 and stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION: Regulatory History, 73 FR 74213 (December 5,
2008).
I. Background
The Postal Service seeks to add a new product identified as Express
Mail & Priority Mail Contract 2 to the Competitive Product List. For
the reasons discussed below, the Commission approves the Request.
On November 25, 2008, the Postal Service filed a formal request
pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add Express
Mail & Priority Mail Contract 2 to the Competitive Product List.\1\ The
Postal Service asserts that the Express Mail & Priority Mail Contract 2
product is a competitive product ``not of general applicability''
within the meaning of 39 U.S.C. 3632(b)(3). This Request has been
assigned Docket No. MC2009-12.
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\1\ Request of the United States Postal Service to Add Express
Mail & Priority Mail Contract 2 to Competitive Product List and
Notice of Establishment of Rates and Class Not of General
Applicability, November 25, 2008 (Request).
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The Postal Service contemporaneously filed a contract related to
the proposed new product pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR
3015.5. The contract has been assigned Docket No. CP2009-14.
In support of its Request, the Postal Service filed the following
materials: (1) A redacted version of the Governors' Decision
authorizing the new product which also includes an analysis of Express
Mail & Priority Mail Contract 2 and certification of the Governors'
vote; \2\ (2) a redacted version of the contract which, among other
things, provides that the contract will expire 3 years from the
effective date, which is proposed to be 1 day after the Commission
issues all regulatory approvals; \3\ (3) requested changes in the Mail
Classification Schedule product list; \4\ (4) a Statement of Supporting
Justification as required by 39 CFR 3020.32; \5\ and (5) certification
of compliance with 39 U.S.C. 3633(a).\6\
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\2\ Attachment A to the Request. The analysis that accompanies
the Governors' Decision notes, among other things, that the contract
is not risk free, but concludes that the risks are manageable.
\3\ Attachment B to the Request.
\4\ Attachment C to the Request.
\5\ Attachment D to the Request.
\6\ Attachment E to the Request.
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In the Statement of Supporting Justification, Kim Parks, Manager,
Sales and Communications, Expedited Shipping, asserts that the service
to be provided under the contract will cover its attributable costs,
make a positive contribution to coverage of institutional costs, and
will increase contribution toward the requisite 5.5 percent of the
Postal Service's total institutional costs. Request, Attachment D, at
1. W. Ashley Lyons, Manager, Corporate Financial Planning, Finance
Department, certifies that the contract complies with 39 U.S.C.
3633(a). See id. Attachment E.
The Postal Service filed much of the supporting materials,
including the unredacted Governors' Decision and the unredacted Express
Mail & Priority Mail Contract 2, under seal. In its Request, the Postal
Service maintains that the contract and related financial information,
including the customer's name and the accompanying analyses that
provide prices, terms, conditions, and financial projections, should
remain confidential. Id. at 2-3.
In Order No. 143, the Commission gave notice of the two dockets,
appointed a public representative, and provided the public with an
opportunity to comment.\7\
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\7\ PRC Order No. 142, Notice and Order Concerning Express Mail
& Priority Mail Contract 2 Negotiated Service Agreement, December 2,
2008 (Order No. 143).
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II. Comments
Comments were filed by the Public Representative.\8\ No filings
were submitted by other interested parties. The Public Representative
states that the Postal Service's filing complies with applicable
Commission rules of practice and procedure, and concludes that the
Express Mail & Priority Mail Contract 2 agreement comports with the
requirements of title 39. Public Representative Comments at 4. He
further states that the agreement appears beneficial to the general
public. Id. at 1.
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\8\ Public Representative Comments in Response to United States
Postal Service Request to Add Express Mail & Priority Mail Contract
2 to Competitive Product List and Notice of Establishment of Rates
and Class Not of General Applicability, December 10, 2008 (Public
Representative Comments).
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III. Commission Analysis
The Commission has reviewed the Request, the contract, the
financial analysis provided under seal that
[[Page 78187]]
accompanies it, and the comments filed by the Public Representative.
Statutory requirements. The Commission's statutory responsibilities
in this instance entail assigning Express Mail & Priority Mail Contract
2 to either the Market Dominant Product List or to the Competitive
Product List. 39 U.S.C. 3642. As part of this responsibility, the
Commission also reviews the proposal for compliance with the Postal
Accountability and Enhancement Act (PAEA) requirements. This includes,
for proposed competitive products, a review of the provisions
applicable to rates for competitive products. 39 U.S.C. 3633.
Product list assignment. In determining whether to assign Express
Mail & Priority Mail Contract 2 as a product to the Market Dominant
Product List or the Competitive Product List, the Commission must
consider whether
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 so, 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 who 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 precluding it from taking unilateral action to increase
prices without the risk of losing volume to private companies. Request,
Attachment D, paragraph (d). The Postal Service also contends that it
may not decrease quality or output without risking the loss of business
to competitors that offer similar expedited delivery services. Id. It
further states that the contract partner supports the addition of the
contract to the Competitive Product List to effectuate the negotiated
contractual terms. Id. at paragraph (g). Finally, the Postal Service
states that the market for expedited delivery services is highly
competitive and requires a substantial infrastructure to support a
national network. It indicates that large carriers serve this market.
Accordingly, the Postal Service states that it is unaware of any small
business concerns that could offer comparable service for this
customer. Id. at paragraph (h).
No commenter opposes the proposed classification of Express Mail &
Priority Mail Contract 2 as competitive. Having considered the
statutory requirements and the support offered by the Postal Service,
the Commission finds that Express Mail & Priority Mail Contract 2 is
appropriately classified as a competitive product and should be added
to the Competitive Product List.
Cost considerations. The Postal Service's financial analysis shows
that Express Mail & Priority Mail Contract 2 results in cost savings
while ensuring that the contract covers its attributable costs, does
not result in subsidization of competitive products by market dominant
products, and increases contribution from competitive products. The
contract is predicated on unit costs for major mail functions, e.g.,
window service, mail processing, and transportation, based on the
shipper's mail characteristics.
The Commission notes that in evaluating costs under a prospective
contract compared to the average, the Postal Service should take into
account all departures from average cost that may be due to services
provided under the contract. The failure to do so, while having no
material effect on the underlying financial analysis of the contract in
this instance, hampers the timely review of the Postal Service's
financial analysis. See also PRC Order No. 138, November 20, 2008, at
6-7.
Based on the data submitted, the Commission finds that Express Mail
& Priority Mail Contract 2 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 competitive products' contribution to
institutional costs (39 U.S.C. 3633(a)(3)). Thus, an initial review of
the proposed Express Mail & Priority Mail Contract 2 indicates that it
comports with the provisions applicable to rates for competitive
products.
The Postal Service shall promptly notify the Commission when the
contract terminates, but no later than the actual termination date. The
Commission will then remove the contract from the Mail Classification
Schedule at the earliest possible opportunity.
In conclusion, the Commission approves Express Mail & Priority Mail
Contract 2 as a new product. The revision to the Competitive Product
List is shown below the signature of this Order and is effective upon
issuance of this Order.
It is Ordered:
1. Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
14) is added to the Competitive Product List as a new product under
Negotiated Service Agreements, Domestic.
2. The Postal Service shall notify the Commission of the
termination date of the contract as discussed in this Order.
3. The Secretary shall arrange for the publication of this Order in
the Federal Register.
List of Subjects in 39 CFR Part 3020
Administrative practice and procedure; Postal Service.
By the Commission.
Steven W. Williams,
Secretary.
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:
PART 3020--PRODUCT LISTS
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. Revise Appendix A to subpart A of part 3020--Mail Classification to
read as follows:
Appendix A to Subpart a of 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
[[Page 78188]]
Confirm
International Reply Coupon Service
International Business Reply Mail Service
Money Orders
Post Office Box Service
Negotiated Service Agreements
HSBC North America Holdings Inc. Negotiated Service Agreement
Bookspan Negotiated Service Agreement
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Market Dominant Product Descriptions
First-Class Mail [Reserved for Class Description]
Single-Piece Letters/Postcards [Reserved for Product
Description]
Bulk Letters/Postcards [Reserved for Product Description]
Flats [Reserved for Product Description]
Parcels [Reserved for Product Description]
Outbound Single-Piece First-Class Mail International [Reserved
for Product Description]
Inbound Single-Piece First-Class Mail International [Reserved
for Product Description]
Standard Mail (Regular and Nonprofit) [Reserved for Class
Description]
High Density and Saturation Letters [Reserved for Product
Description]
High Density and Saturation Flats/Parcels [Reserved for Product
Description]
Carrier Route [Reserved for Product Description]
Letters [Reserved for Product Description]
Flats [Reserved for Product Description]
Not Flat-Machinables (NFMs)/Parcels [Reserved for Product
Description]
Periodicals [Reserved for Class Description]
Within County Periodicals [Reserved for Product Description]
Outside County Periodicals [Reserved for Product Description]
Package Services [Reserved for Class Description]
Single-Piece Parcel Post [Reserved for Product Description]
Inbound Surface Parcel Post (at UPU rates) [Reserved for Product
Description]
Bound Printed Matter Flats [Reserved for Product Description]
Bound Printed Matter Parcels [Reserved for Product Description]
Media Mail/Library Mail [Reserved for Product Description]
Special Services [Reserved for Class Description]
Ancillary Services [Reserved for Product Description]
Address Correction Service [Reserved for Product Description]
Applications and Mailing Permits [Reserved for Product
Description]
Business Reply Mail [Reserved for Product Description]
Bulk Parcel Return Service [Reserved for Product Description]
Certified Mail [Reserved for Product Description]
Certificate of Mailing [Reserved for Product Description]
Collect on Delivery [Reserved for Product Description]
Delivery Confirmation [Reserved for Product Description]
Insurance [Reserved for Product Description]
Merchandise Return Service [Reserved for Product Description]
Parcel Airlift (PAL) [Reserved for Product Description]
Registered Mail [Reserved for Product Description]
Return Receipt [Reserved for Product Description]
Return Receipt for Merchandise [Reserved for Product
Description]
Restricted Delivery [Reserved for Product Description]
Shipper-Paid Forwarding [Reserved for Product Description]
Signature Confirmation [Reserved for Product Description]
Special Handling [Reserved for Product Description]
Stamped Envelopes [Reserved for Product Description]
Stamped Cards [Reserved for Product Description]
Premium Stamped Stationery [Reserved for Product Description]
Premium Stamped Cards [Reserved for Product Description]
International Ancillary Services [Reserved for Product
Description]
International Certificate of Mailing [Reserved for Product
Description]
International Registered Mail [Reserved for Product Description]
International Return Receipt [Reserved for Product Description]
International Restricted Delivery [Reserved for Product
Description]
Address List Services [Reserved for Product Description]
Caller Service [Reserved for Product Description]
Change-of-Address Credit Card Authentication [Reserved for
Product Description]
Confirm [Reserved for Product Description]
International Reply Coupon Service [Reserved for Product
Description]
International Business Reply Mail Service [Reserved for Product
Description]
Money Orders [Reserved for Product Description]
Post Office Box Service [Reserved for Product Description]
Negotiated Service Agreements [Reserved for Class Description]
HSBC North America Holdings Inc. Negotiated Service Agreement
[Reserved for Product Description]
Bookspan Negotiated Service Agreement [Reserved for Product
Description]
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
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)
Canada Post--United States Postal Service Contractual Bilateral
Agreement for Inbound Competitive Services (MC2009-8 and CP2009-9)
International Money Transfer Service
International Ancillary Services
Special Services
Premium Forwarding Service
Negotiated Service Agreements
Domestic
Express Mail Contract 1 (MC2008-5)
Express Mail Contract 2 (MC2009-3 and CP2009-4)
Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
14)
Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
Parcel Select & Parcel Return Service Contract 1 (MC2009-11 and
CP2009-13)
Priority Mail Contract 1 (MC2008-8 and CP2008-26)
Priority Mail Contract 2 (MC2009-2 and CP2009-3)
Priority Mail Contract 3 (MC2009-4 and CP2009-5)
Priority Mail Contract 4 (MC2009-5 and CP2009-6)
Outbound International
Global Expedited Package Services (GEPS) Contracts
GEPS 1 (CP2008-5, CP2008-11, CP2008-12, and CP2008-13, CP2008-
18, CP2008-19, CP2008-20, CP2008-21, CP2008-22, CP2008-23, and
CP2008-24)
Global Plus Contracts
Global Plus 1 (CP2008-9 and CP2008-10)
Global Plus 2 (MC2008-7, CP2008-16 and CP2008-17)
Inbound Direct Entry Contracts with Foreign Postal
Administrations (MC2008-6, CP2008-14 and CP2008-15)
Competitive Product Descriptions
Express Mail [Reserved for Group Description]
Express Mail [Reserved for Product Description]
Outbound International Expedited Services [Reserved for Product
Description]
Inbound International Expedited Services [Reserved for Product
Description]
Priority [Reserved for Product Description]
Priority Mail [Reserved for Product Description]
Outbound Priority Mail International [Reserved for Product
Description]
Inbound Air Parcel Post [Reserved for Product Description]
Parcel Select [Reserved for Group Description]
Parcel Return Service [Reserved for Group Description]
International [Reserved for Group Description]
International Priority Airlift (IPA) [Reserved for Product
Description]
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International Surface Airlift (ISAL) [Reserved for Product
Description]
International Direct Sacks--M-Bags [Reserved for Product
Description]
Global Customized Shipping Services [Reserved for Product
Description]
International Money Transfer Service [Reserved for Product
Description]
Inbound Surface Parcel Post (at non-UPU rates) [Reserved for
Product Description]
International Ancillary Services [Reserved for Product
Description]
International Certificate of Mailing [Reserved for Product
Description]
International Registered Mail [Reserved for Product Description]
International Return Receipt [Reserved for Product Description]
International Restricted Delivery [Reserved for Product
Description]
International Insurance [Reserved for Product Description]
Negotiated Service Agreements [Reserved for Group Description]
Domestic [Reserved for Product Description]
Outbound International [Reserved for Group Description]
Part C--Glossary of Terms and Conditions [Reserved]
Part D--Country Price Lists for International Mail [Reserved]
[FR Doc. E8-30420 Filed 12-19-08; 8:45 am]
BILLING CODE 7710-FW-P
