New Domestic Mail Product, 15384-15387 [E9-7680]
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15384
Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Rules and Regulations
[Revise 4.6d by adding a new last
sentence as follows:]
d. * * * Window envelopes also
must meet the specifications in 601.6.3.
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ASF or BMC or for mail placed on an
ASF, BMC, or SCF pallet under the
option in 705.8.10.3.
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See 401.1.0 for definitions of
machinable and irregular parcels.
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300
Commercial Mail Flats
301
Physical Standards
400
Commercial Parcels
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. E9–7570 Filed 4–3–09; 8:45 am]
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BILLING CODE 7710–12–P
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3.0 Physical Standards for
Automation Flats
460
Bound Printed Matter
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[Renumber 3.3 through 3.7 as new 3.4
through 3.8, and add new 3.3 as
follows:]
465
Mail Preparation
39 CFR Part 3020
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5.0
Preparing Presorted Parcels
[Docket Nos. MC2009–21 and CP2009–26;
Order No. 197]
3.3
5.1
Basic Standards
Flats—Machine Compatibility
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POSTAL REGULATORY COMMISSION
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New Domestic Mail Product
Flat-size mailpieces meeting the
standards in 1.0 and 3.0, but unable to
meet the minimum flexibility standards
described in 1.3, are not eligible for
automation prices unless the mailpieces
demonstrate flats-machine
compatibility. Rigid flat-size mailpieces
in paper, polywrap or similar packaging
that allows for the pieces to be grasped
and inducted into USPS flat-sorting
equipment may qualify for automation
prices when meeting the following
standards:
a. Mailpieces must be enclosed in
envelopes or similar packaging capable
of withstanding normal processing on
USPS flat-sorting equipment.
b. Mailpieces must be approved for
automation flats pricing by the USPS.
Mailers seeking approval for mailpieces
under this standard must contact their
local manager, business mail entry for
instructions on submitting sample
mailpieces to the Pricing and
Classification Service Center (PCSC)
(see 608.8.0 for address) for analysis and
possible testing. Mailpieces having a
previous approval from the PCSC for
automation flats prices, granted after
May 2007, are not required to be
resubmitted for a new approval. These
and all other approvals granted under
3.3 expire in May 2010.
c. Mailpieces approved for
automation flats pricing under this
standard must print the endorsement
‘‘Automation Flat’’ directly under or to
the left of the postage imprint.
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5.1.1 General Preparation
Requirements
All mailings of Presorted Bound
Printed Matter (BPM) are subject to
these general standards:
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[Revise item b as follows:]
b. All pieces in a mailing must be
within the same processing category.
See 401.1.0 for definitions of
machinable and irregular parcels.
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302 Elements on the Face of a
Mailpiece
5.0
Preparing Library Mail Parcels
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4.0
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4.6
Barcode in Address Block
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When the barcode is included as part
of the address block:
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Media Mail
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475
Mail Preparation
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5.0 Preparing Media Mail Parcels
[Revise introductory paragraph of 5.1
as follows:]
5.1 Basic Standards
All mailings of Presorted Media Mail
are subject these general requirements:
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[Revise item b as follows:]
b. All parcels in a mailing must be
within the same processing category.
See 401.1.0 for definitions of
machinable and irregular parcels.
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480
Library Mail
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485
Mail Preparation
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[Revise introductory paragraph of 5.1
as follows:]
Barcode Placement
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470
5.1 Basic Standards
All mailings of Presorted Library Mail
are subject to these general standards:
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[Revise item b as follows:]
b. All pieces in a mailing must be
within the same processing category.
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Postal Regulatory Commission.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Commission is adding
the Postal Service’s Priority Mail
Contract 5 negotiated service agreement
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.
DATES: Effective April 6, 2009 and is
applicable beginning March 30, 2009.
FOR FURTHER INFORMATION CONTACT:
Stephen L. Sharfman, General Counsel,
202–789–6820 and
stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION:
Regulatory History, 74 FR 12406
(March 24, 2009).
I. Background
The Postal Service seeks to add a new
product identified as Priority Mail
Contract 5 to the Competitive Product
List. For the reasons discussed below,
the Commission approves the Request.
On March 13, 2009, the Postal Service
filed a formal request pursuant to 39
U.S.C. 3642 and 39 CFR 3020.30 et seq.
to add Priority Mail Contract 5 to the
Competitive Product List.1 The Postal
Service asserts that the Priority Mail
Contract 5 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. MC2009–21.
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. CP2009–26.
1 Request of the United States Postal Service to
Add Priority Mail Contract 5 to Competitive
Product List and Notice of Establishment of Rates
and Class Not of General Applicability, March 13,
2009 (Request).
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Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Rules and Regulations
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
Priority Mail Contract 5; 2 (2) a redacted
version of the contract which, among
other things, provides that the contract
will expire 1 year 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
In the Statement of Supporting
Justification, Mary Prince Anderson,
Acting 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 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. 193, 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 comments were
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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.
7 PRC Order No. 193, Notice and Order
Concerning Priority Mail Contract 5 Negotiated
Service Agreement, March 17, 2009 (Order No.
193).
8 Public Representative Comments in Response to
United States Postal Service Request to Add Priority
Mail Contract 5 to Competitive Product List and
Notice of Establishment of Rates and Class Not of
General Applicability, March 25, 2009 (Public
Representative Comments).
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16:36 Apr 03, 2009
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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
Priority Mail Contract 5 agreement
comports with the requirements of title
39. Id. at 4. He further states that the
agreement appears to be beneficial to
the general public. Id. at 1.
The Public Representative believes
that the Postal Service has provided
adequate justification for maintaining
confidentiality in this case. Id. at 2–3.
He indicates that several contractual
provisions are mutually beneficial to the
parties and general public. Id.
III. Commission Analysis
The Commission has reviewed the
Request, the contract, the financial
analysis provided under seal that
accompanies it, and the comments filed
by the Public Representative.
Statutory requirements. The
Commission’s statutory responsibilities
in this instance entail assigning Priority
Mail Contract 5 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 Priority
Mail Contract 5 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
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15385
risk of losing volume to private
companies. Request, Attachment D,
para. (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 para. (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 para. (h).
No commenter opposes the proposed
classification of Priority Mail Contract 5
as competitive. Having considered the
statutory requirements and the support
offered by the Postal Service, the
Commission finds that Priority Mail
Contract 5 is appropriately classified as
a competitive product and should be
added to the Competitive Product List.
Cost considerations. The Postal
Service presents a financial analysis
showing that Priority Mail Contract 5
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.
Based on the data submitted, the
Commission finds that Priority Mail
Contract 5 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 proposed Priority Mail
Contract 5 indicates that it comports
with the provisions applicable to rates
for competitive products.
The electronic files submitted in
support of the Request did not include
all supporting data. Future requests
must provide all electronic files
showing calculations in support of the
financial models associated with the
request. A failure to provide such
information may delay resolution of
requests in the future.
Other considerations. The Postal
Service shall promptly notify the
Commission of the scheduled
termination date of the agreement. If the
agreement terminates earlier than
anticipated, the Postal Service shall
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15386
Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Rules and Regulations
inform the Commission prior to the new
termination date. The Commission will
then remove the product from the Mail
Classification Schedule at the earliest
possible opportunity.
In conclusion, the Commission
approves Priority Mail Contract 5 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.
IV. Ordering Paragraphs
It is Ordered:
1. Priority Mail Contract 5 (MC2009–
21 and CP2009–26) 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 scheduled
termination date and update the
Commission if termination occurs prior
to that date, 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:
■
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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
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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
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
Inbound International
Canada Post—United States Postal Service
Contractual Bilateral Agreement for
Inbound Market Dominant Services
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]
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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
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06APR1
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Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Rules and Regulations
[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
Competitive Product List
Express Mail
Express Mail
Outbound International Expedited Services
Inbound International Expedited Services
Inbound International Expedited Services 1
(CP2008–7)
Inbound International Expedited Services 2
(MC2009–10 and CP2009–12)
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 Contract 3 (MC2009–15 and
CP2009–21)
Express Mail & Priority Mail Contract 1
(MC2009–6 and CP2009–7)
Express Mail & Priority Mail Contract 2
(MC2009–12 and CP2009–14)
Express Mail & Priority Mail Contract 3
(MC2009–13 and CP2009–17)
Express Mail & Priority Mail Contract 4
(MC2009–17 and CP2009–24)
Express Mail & Priority Mail Contract 5
(MC2009–18 and CP2009–25)
Parcel Return Service Contract 1 (MC2009–
1 and CP2009–2)
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)
Priority Mail Contract 5 (MC2009–21 and
CP2009–26)
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16:36 Apr 03, 2009
Jkt 217001
Outbound International
Global Direct Contracts (MC2009–9,
CP2009–10, and CP2009–11)
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 International
Inbound Direct Entry Contracts With
Foreign Postal Administrations
(MC2008–6, CP2008–14 and CP2008–15)
International Business Reply Service
Competitive Contract 1 (MC2009–14 and
CP2009–20)
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]
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]
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15387
Part C—Glossary of Terms and Conditions
[Reserved]
Part D—Country Price Lists for International
Mail [Reserved]
[FR Doc. E9–7680 Filed 4–3–09; 8:45 am]
BILLING CODE 7710–FW–P
DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Part 232
[Docket No. FRA–2004–17529; Notice No.
7]
RIN 2130–AB94
Adjustments to the Minimum and
Maximum Civil Monetary Penalties for
Violations of Federal Railroad Safety
Laws or Federal Railroad
Administration Safety Regulations;
Correction
AGENCY: Federal Railroad
Administration (FRA), Department of
Transportation (DOT).
ACTION: Correcting amendment.
SUMMARY: On December 30, 2008, FRA
published a final rule, pursuant to two
statutes, which increased the minimum,
ordinary maximum, and aggravated
maximum civil monetary penalty it may
apply when assessing a civil penalty for
a violation of a railroad safety statute or
regulation under its authority. (73 FR
79698). In preparing that final rule for
publication, an error was made: FRA
instructed that the numerical amount
‘‘$16,000’’ be removed from footnote 1
of appendix A to 49 CFR part 232 of the
final rule and the numerical amount
‘‘$25,000’’ be added in its place. The
instruction should have directed the
removal of the numerical amount
‘‘$11,000’’ and the addition of
‘‘$25,000’’ in its place.
DATES: The correction to the final rule
is effective on April 6, 2009.
FOR FURTHER INFORMATION CONTACT:
Stephen N. Gordon, Trial Attorney,
Office of Chief Counsel, FRA, 1200 New
Jersey Avenue, SE., Mail Stop 10,
Washington, DC 20590 (telephone 202–
493–6001), stephen.n.gordon@dot.gov.
SUPPLEMENTARY INFORMATION: An error
was included in the final rule published
on December 30, 2008. (73 FR 79698).
FRA failed to account for an October 16,
2008 amendment to footnote 1 in
appendix A to part 232. The October 16,
2008 amendment inadvertently changed
the total ordinary maximum civil
penalty amount normally assessed per
day for two or more violations within a
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06APR1
]]>Agencies
[Federal Register Volume 74, Number 64 (Monday, April 6, 2009)]
[Rules and Regulations]
[Pages 15384-15387]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7680]
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2009-21 and CP2009-26; Order No. 197]
New Domestic Mail Product
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission is adding the Postal Service's Priority Mail
Contract 5 negotiated service agreement 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.
DATES: Effective April 6, 2009 and is applicable beginning March 30,
2009.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 and stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION:
Regulatory History, 74 FR 12406 (March 24, 2009).
I. Background
The Postal Service seeks to add a new product identified as
Priority Mail Contract 5 to the Competitive Product List. For the
reasons discussed below, the Commission approves the Request.
On March 13, 2009, the Postal Service filed a formal request
pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add Priority
Mail Contract 5 to the Competitive Product List.\1\ The Postal Service
asserts that the Priority Mail Contract 5 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. MC2009-21.
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\1\ Request of the United States Postal Service to Add Priority
Mail Contract 5 to Competitive Product List and Notice of
Establishment of Rates and Class Not of General Applicability, March
13, 2009 (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. CP2009-26.
[[Page 15385]]
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 Priority
Mail Contract 5; \2\ (2) a redacted version of the contract which,
among other things, provides that the contract will expire 1 year 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, Mary Prince Anderson,
Acting 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
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. 193, 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. 193, Notice and Order Concerning Priority Mail
Contract 5 Negotiated Service Agreement, March 17, 2009 (Order No.
193).
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II. Comments
Comments were filed by the Public Representative.\8\ No comments
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
Priority Mail Contract 5 agreement comports with the requirements of
title 39. Id. at 4. He further states that the agreement appears to be
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 Priority Mail Contract 5 to
Competitive Product List and Notice of Establishment of Rates and
Class Not of General Applicability, March 25, 2009 (Public
Representative Comments).
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The Public Representative believes that the Postal Service has
provided adequate justification for maintaining confidentiality in this
case. Id. at 2-3. He indicates that several contractual provisions are
mutually beneficial to the parties and general public. Id.
III. Commission Analysis
The Commission has reviewed the Request, the contract, the
financial analysis provided under seal that accompanies it, and the
comments filed by the Public Representative.
Statutory requirements. The Commission's statutory responsibilities
in this instance entail assigning Priority Mail Contract 5 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 Priority
Mail Contract 5 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, para. (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 para. (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 para. (h).
No commenter opposes the proposed classification of Priority Mail
Contract 5 as competitive. Having considered the statutory requirements
and the support offered by the Postal Service, the Commission finds
that Priority Mail Contract 5 is appropriately classified as a
competitive product and should be added to the Competitive Product
List.
Cost considerations. The Postal Service presents a financial
analysis showing that Priority Mail Contract 5 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.
Based on the data submitted, the Commission finds that Priority
Mail Contract 5 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
proposed Priority Mail Contract 5 indicates that it comports with the
provisions applicable to rates for competitive products.
The electronic files submitted in support of the Request did not
include all supporting data. Future requests must provide all
electronic files showing calculations in support of the financial
models associated with the request. A failure to provide such
information may delay resolution of requests in the future.
Other considerations. The Postal Service shall promptly notify the
Commission of the scheduled termination date of the agreement. If the
agreement terminates earlier than anticipated, the Postal Service shall
[[Page 15386]]
inform the Commission prior to the new termination date. The Commission
will then remove the product from the Mail Classification Schedule at
the earliest possible opportunity.
In conclusion, the Commission approves Priority Mail Contract 5 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.
IV. Ordering Paragraphs
It is Ordered:
1. Priority Mail Contract 5 (MC2009-21 and CP2009-26) 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 scheduled
termination date and update the Commission if termination occurs prior
to that date, 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 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
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
Inbound International
Canada Post--United States Postal Service Contractual Bilateral
Agreement for Inbound Market Dominant Services
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
[[Page 15387]]
[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
Competitive Product List
Express Mail
Express Mail
Outbound International Expedited Services
Inbound International Expedited Services
Inbound International Expedited Services 1 (CP2008-7)
Inbound International Expedited Services 2 (MC2009-10 and
CP2009-12)
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 Contract 3 (MC2009-15 and CP2009-21)
Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
14)
Express Mail & Priority Mail Contract 3 (MC2009-13 and CP2009-
17)
Express Mail & Priority Mail Contract 4 (MC2009-17 and CP2009-
24)
Express Mail & Priority Mail Contract 5 (MC2009-18 and CP2009-
25)
Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
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)
Priority Mail Contract 5 (MC2009-21 and CP2009-26)
Outbound International
Global Direct Contracts (MC2009-9, CP2009-10, and CP2009-11)
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 International
Inbound Direct Entry Contracts With Foreign Postal
Administrations (MC2008-6, CP2008-14 and CP2008-15)
International Business Reply Service Competitive Contract 1
(MC2009-14 and CP2009-20)
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]
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. E9-7680 Filed 4-3-09; 8:45 am]
BILLING CODE 7710-FW-P
