Priority Mail Contract, 37553-37556 [E9-18030]
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Federal Register / Vol. 74, No. 144 / Wednesday, July 29, 2009 / Rules and Regulations
POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2009–28 and CP2009–38;
Order No. 232]
Priority Mail Contract
Postal Regulatory Commission.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Commission is adding a
new postal product 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 July 29, 2009 and is
applicable beginning July 1, 2009.
FOR FURTHER INFORMATION CONTACT:
Stephen L. Sharfman, General Counsel,
202–7890–6824 or stephen.sharfman@
prc.gov.
Regulatory
History, 74 FR 30333 (June 25, 2009).
SUPPLEMENTARY HISTORY:
I. Background
II. Comments
III. Commission Analysis
IV. Ordering Paragraphs
I. Background
The Postal Service seeks to add a new
product identified as Priority Mail
Contract 12 to the Competitive Product
List. For the reasons discussed below,
the Commission approves the Request.
On June 11, 2009, the Postal Service
filed a notice, pursuant to 39 U.S.C.
3632(b)(3) and 39 CFR 3015.5,
announcing that it has entered into an
additional contract (Priority Mail
Contract 12), which it attempts to
classify within the previously proposed
Priority Mail Contract Group product.1
In support, the Postal Service filed the
proposed contract and referenced
Governors’ Decision 09–6 filed in
Docket No. MC2009–25. Id. at 1. The
Notice has been assigned Docket No.
CP2009–38.
In response to Order No. 223,2 and in
accordance with 39 U.S.C. 3642 and 39
CFR 3020 subpart B, the Postal Service
filed a formal request to add Priority
Mail Contract 12 to the Competitive
Product List as a separate product.3 The
Postal Service asserts that the Priority
Mail Contract 12 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. MC2009–28.
In support of its Notice and Request,
the Postal Service filed the following
materials: (1) 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 the day that the
Commission issues all regulatory
approvals; 4 (2) requested changes in the
Mail Classification Schedule product
list; 5 (3) a Statement of Supporting
Justification as required by 39 CFR
3020.32; 6 and (4) certification of
compliance with 39 U.S.C. 3633(a).7
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 B, at 1. W. Ashley
Lyons, Manager, Corporate Financial
Planning, Finance Department, certifies
that the contract complies with 39
U.S.C. 3633(a). Notice, Attachment B.
The Postal Service filed much of the
supporting materials, including the
unredacted contract, under seal. In its
Notice, 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. Notice at 2–3.
In Order No. 223, the Commission
gave notice of the two dockets,
requested supplemental information,
appointed a public representative, and
provided the public with an opportunity
to comment.8 On June 22, 2009,
Chairman’s Information Request No. 1
was filed.9 On June 23, 2009, the Postal
Service filed the supplemental
information requested.10 The Postal
Service filed its response to the
4 Attachment
A to the Notice.
A to the Request.
6 Attachment B to the Request.
7 Attachment B to the Notice.
8 Order No. 223 at 1–4.
9 Chairman’s Information Request No. 1 and
Notice of Filing of Question Under Seal, June 22,
2009. A portion of the Chairman’s Information
Request was filed under seal.
10 Response of the United States Postal Service to
Commission’s Request for Supplemental
Information in Order No. 223, June 23, 2009.
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5 Attachment
1 Notice of Establishment of Rates and Class Not
of General Applicability (Priority Mail Contract 12),
June 11, 2009 (Notice).
2 PRC Order No. 223, Notice and Order
Concerning Filing of Priority Mail Contract 12
Negotiated Service Agreement, June 17, 2009 (Order
No. 223).
3 Request of the United States Postal Service to
Add Priority Mail Contract 12 to Competitive
Product List, June 23, 2009 (Request).
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Chairman’s Information Request on June
26, 2009.11
II. Comments
Comments were filed by the Public
Representative.12 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 12 agreement
comports with the requirements of title
39 and is appropriately classified as
competitive. Id. at 3.
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 the contractual
provisions are mutually beneficial to the
parties and general public. Id. at 4.
III. Commission Analysis
The Commission has reviewed the
Notice, the Request, the contract, the
financial analysis provided under seal
that accompanies it, the Postal Service’s
responses to Chairman’s Information
Request No. 1, the Postal Service’s
response to the Commission’s request
for supplemental information, and the
comments filed by the Public
Representative.
Statutory requirements. The
Commission’s statutory responsibilities
in this instance entail assigning Priority
Mail Contract 12 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 12 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.
11 Response to Chairman’s Information Request
No. 1, Question 2 and Notice of Filing Responses
to Questions 1 and 3 Under Seal, June 26, 2009.
12 Public Representative Comments in Response
to United States Postal Service Notice of
Establishment of Rates and Class Not of General
Applicability (Priority Mail Contract 12), June 26,
2009 (Public Representative Comments).
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Federal Register / Vol. 74, No. 144 / Wednesday, July 29, 2009 / Rules and Regulations
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 B,
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
12 as competitive. Having considered
the statutory requirements and the
support offered by the Postal Service,
the Commission finds that Priority Mail
Contract 12 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 12
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.
Order No. 223 and Chairman’s
Information Request No. 1 sought
additional support and justification for
particular cost saving elements. The
Postal Service’s responses did not
persuade the Commission that certain
cost savings elements were appropriate
here.
Accordingly, the Commission’s
analysis of the proposed contract is
based on alternative cost estimates of
certain mail functions. The Commission
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employed this analysis to determine
whether changed cost inputs would
materially affect the contract’s financial
analysis.13 The Commission concludes
that the changed inputs do not have a
material effect on the underlying
financial analysis of the contract.
Based on the data submitted and the
Commission’s alternative analysis, the
Commission finds that Priority Mail
Contract 12 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 12 indicates that it comports
with the provisions applicable to rates
for competitive products.
The electronic files submitted in
support of the Notice did not include all
supporting data. As noted in Order No.
231, Docket Nos. MC2009–27 and
CP2009–37, issued concurrently today,
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
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 12 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 12 (MC2009–
28 and CP2009–38) 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 the termination date
occurs prior to that date, as discussed in
this order.
13 The Commission’s analysis is set forth in
Library Reference PRC–CP2009–38–NP–LR–1,
which, because it contains confidential information,
is being filed under seal.
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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.
Issued: July 1, 2009.
By the Commission.
Judith M. Grady,
Acting 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 Schedule
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
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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
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[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
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
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37555
Priority Mail
Outbound Priority Mail International
Inbound Air Parcel Post
Royal Mail Group Inbound Air Parcel Post
Agreement
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)
Priority Mail Contract 6 (MC2009–25 and
CP2009–30)
Priority Mail Contract 7 (MC2009–25 and
CP2009–31)
Priority Mail Contract 8 (MC2009–25 and
CP2009–32)
Priority Mail Contract 9 (MC2009–25 and
CP2009–33)
Priority Mail Contract 10 (MC2009–25 and
CP2009–34)
Priority Mail Contract 11 (MC2009–27 and
CP2009–37)
Priority Mail Contract 12 (MC2009–28 and
CP2009–38)
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)
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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. E9–18030 Filed 7–28–09; 8:45 am]
BILLING CODE 7710–FW–P
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ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[FRL–8933–5]
Approval and Promulgation of Air
Quality Implementation Plans; Iowa;
Update to Materials Incorporated by
Reference
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Final rule; notice of
administrative change.
SUMMARY: EPA is updating the materials
submitted by Iowa that are incorporated
by reference (IBR) into the State
implementation plan (SIP). The
regulations affected by this update have
been previously submitted by the State
agency and approved by EPA. This
update affects the SIP materials that are
available for public inspection at the
National Archives and Records
Administration (NARA), the Air and
Radiation Docket and Information
Center located at EPA Headquarters in
Washington, DC, and the Regional
Office.
DATES: Effective Date: This action is
effective July 29, 2009.
ADDRESSES: SIP materials which are
incorporated by reference into 40 CFR
part 52 are available for inspection at
the following locations: Environmental
Protection Agency, Region 7, 901 North
5th Street, Kansas City, Kansas 66101;
or at https://www.epa.gov/region07/
programs/artd/air/rules/fedapprv.htm;
the Air and Radiation Docket and
Information Center, EPA Headquarters
Library, Room Number 3334, EPA West
Building, 1301 Constitution Avenue,
NW., Washington, DC 20460, and the
National Archives and Records
Administration. If you wish to obtain
materials from a docket in the EPA
Headquarters Library, please call the
Office of Air and Radiation Docket at
(202) 566–1742. For information on the
availability of this material at NARA,
call (202) 741–6030, or go to: https://
www.archives.gov/federal_register/
code_of_federal_regulations/
ibr_locations.html.
FOR FURTHER INFORMATION CONTACT:
Evelyn VanGoethem at (913) 551–7659,
or by e-mail at
vangoethem.evelyn@epa.gov.
The SIP is
a living document which the State
revises as necessary to address the
unique air pollution problems in the
State. Therefore, EPA from time to time
must take action on SIP revisions
SUPPLEMENTARY INFORMATION:
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containing new and/or revised
regulations to make them part of the
SIP. On May 22, 1997 (62 FR 27968),
EPA revised the procedures for
incorporating by reference Federally
approved SIPs, as a result of
consultations between EPA and the
Office of the Federal Register. The
description of the revised SIP
document, IBR procedures and
‘‘Identification of plan’’ format are
discussed in further detail in the May
22, 1997, Federal Register document.
On February 12, 1999, EPA published
a document in the Federal Register (64
FR 7091) beginning the new IBR
procedure for Iowa. On September 23,
2004 (69 FR 56942), EPA published an
update to the IBR material for Iowa.
In this document, EPA is doing the
following:
1. Announcing the update to the IBR
material as of July 1, 2009.
2. Correcting the date format in the
‘‘State effective date’’ or ‘‘State
Submittal date’’ and ‘‘EPA approval
date’’ columns in § 52.820 paragraphs
(c), (d) and (e). Dates are numerical
month/day/year without additional
zeros.
3. Modifying the Federal Register
citation in § 52.820 paragraphs (c), (d)
and (e) to reflect the beginning page of
the preamble as opposed to the page
number of the regulatory text.
4. Removing the second entry for 567–
22.4 in § 52.820 paragraph (c) under
Chapter 22.
EPA has determined that today’s rule
falls under the ‘‘good cause’’ exemption
in section 553(b)(3)(B) of the
Administrative Procedures Act (APA)
which, upon finding ‘‘good cause,’’
authorizes agencies to dispense with
public participation and section
553(d)(3), which allows an agency to
make a rule effective immediately
(thereby avoiding the 30-day delayed
effective date otherwise provided for in
the APA). Today’s rule simply codifies
provisions which are already in effect as
a matter of law in Federal and approved
State programs. Under section 553 of the
APA, an agency may find good cause
where procedures are ‘‘impractical,
unnecessary, or contrary to the public
interest.’’ Public comment is
‘‘unnecessary’’ and ‘‘contrary to the
public interest’’ since the codification
only reflects existing law. Immediate
notice in the CFR benefits the public by
providing notice of the updated Iowa
SIP compilation.
Statutory and Executive Order Reviews
Under the Clean Air Act, the
Administrator is required to approve a
SIP submission that complies with the
provisions of the Act and applicable
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]]>Agencies
[Federal Register Volume 74, Number 144 (Wednesday, July 29, 2009)]
[Rules and Regulations]
[Pages 37553-37556]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18030]
[[Page 37553]]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2009-28 and CP2009-38; Order No. 232]
Priority Mail Contract
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
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SUMMARY: The Commission is adding a new postal product 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 July 29, 2009 and is applicable beginning July 1,
2009.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-7890-6824 or stephen.sharfman@ prc.gov.
SUPPLEMENTARY HISTORY: Regulatory History, 74 FR 30333 (June 25, 2009).
I. Background
II. Comments
III. Commission Analysis
IV. Ordering Paragraphs
I. Background
The Postal Service seeks to add a new product identified as
Priority Mail Contract 12 to the Competitive Product List. For the
reasons discussed below, the Commission approves the Request.
On June 11, 2009, the Postal Service filed a notice, pursuant to 39
U.S.C. 3632(b)(3) and 39 CFR 3015.5, announcing that it has entered
into an additional contract (Priority Mail Contract 12), which it
attempts to classify within the previously proposed Priority Mail
Contract Group product.\1\ In support, the Postal Service filed the
proposed contract and referenced Governors' Decision 09-6 filed in
Docket No. MC2009-25. Id. at 1. The Notice has been assigned Docket No.
CP2009-38.
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\1\ Notice of Establishment of Rates and Class Not of General
Applicability (Priority Mail Contract 12), June 11, 2009 (Notice).
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In response to Order No. 223,\2\ and in accordance with 39 U.S.C.
3642 and 39 CFR 3020 subpart B, the Postal Service filed a formal
request to add Priority Mail Contract 12 to the Competitive Product
List as a separate product.\3\ The Postal Service asserts that the
Priority Mail Contract 12 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. MC2009-28.
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\2\ PRC Order No. 223, Notice and Order Concerning Filing of
Priority Mail Contract 12 Negotiated Service Agreement, June 17,
2009 (Order No. 223).
\3\ Request of the United States Postal Service to Add Priority
Mail Contract 12 to Competitive Product List, June 23, 2009
(Request).
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In support of its Notice and Request, the Postal Service filed the
following materials: (1) 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 the day that the Commission
issues all regulatory approvals; \4\ (2) requested changes in the Mail
Classification Schedule product list; \5\ (3) a Statement of Supporting
Justification as required by 39 CFR 3020.32; \6\ and (4) certification
of compliance with 39 U.S.C. 3633(a).\7\
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\4\ Attachment A to the Notice.
\5\ Attachment A to the Request.
\6\ Attachment B to the Request.
\7\ Attachment B to the Notice.
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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 B, at 1. W. Ashley Lyons, Manager, Corporate
Financial Planning, Finance Department, certifies that the contract
complies with 39 U.S.C. 3633(a). Notice, Attachment B.
The Postal Service filed much of the supporting materials,
including the unredacted contract, under seal. In its Notice, 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. Notice at 2-3.
In Order No. 223, the Commission gave notice of the two dockets,
requested supplemental information, appointed a public representative,
and provided the public with an opportunity to comment.\8\ On June 22,
2009, Chairman's Information Request No. 1 was filed.\9\ On June 23,
2009, the Postal Service filed the supplemental information
requested.\10\ The Postal Service filed its response to the Chairman's
Information Request on June 26, 2009.\11\
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\8\ Order No. 223 at 1-4.
\9\ Chairman's Information Request No. 1 and Notice of Filing of
Question Under Seal, June 22, 2009. A portion of the Chairman's
Information Request was filed under seal.
\10\ Response of the United States Postal Service to
Commission's Request for Supplemental Information in Order No. 223,
June 23, 2009.
\11\ Response to Chairman's Information Request No. 1, Question
2 and Notice of Filing Responses to Questions 1 and 3 Under Seal,
June 26, 2009.
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II. Comments
Comments were filed by the Public Representative.\12\ 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 12 agreement comports with the requirements of
title 39 and is appropriately classified as competitive. Id. at 3.
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\12\ Public Representative Comments in Response to United States
Postal Service Notice of Establishment of Rates and Class Not of
General Applicability (Priority Mail Contract 12), June 26, 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 the contractual provisions are
mutually beneficial to the parties and general public. Id. at 4.
III. Commission Analysis
The Commission has reviewed the Notice, the Request, the contract,
the financial analysis provided under seal that accompanies it, the
Postal Service's responses to Chairman's Information Request No. 1, the
Postal Service's response to the Commission's request for supplemental
information, and the comments filed by the Public Representative.
Statutory requirements. The Commission's statutory responsibilities
in this instance entail assigning Priority Mail Contract 12 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 12 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.
[[Page 37554]]
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 B, 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 12 as competitive. Having considered the statutory
requirements and the support offered by the Postal Service, the
Commission finds that Priority Mail Contract 12 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 12 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. Order
No. 223 and Chairman's Information Request No. 1 sought additional
support and justification for particular cost saving elements. The
Postal Service's responses did not persuade the Commission that certain
cost savings elements were appropriate here.
Accordingly, the Commission's analysis of the proposed contract is
based on alternative cost estimates of certain mail functions. The
Commission employed this analysis to determine whether changed cost
inputs would materially affect the contract's financial analysis.\13\
The Commission concludes that the changed inputs do not have a material
effect on the underlying financial analysis of the contract.
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\13\ The Commission's analysis is set forth in Library Reference
PRC-CP2009-38-NP-LR-1, which, because it contains confidential
information, is being filed under seal.
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Based on the data submitted and the Commission's alternative
analysis, the Commission finds that Priority Mail Contract 12 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
12 indicates that it comports with the provisions applicable to rates
for competitive products.
The electronic files submitted in support of the Notice did not
include all supporting data. As noted in Order No. 231, Docket Nos.
MC2009-27 and CP2009-37, issued concurrently today, 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
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 12 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 12 (MC2009-28 and CP2009-38) 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 the termination date
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.
Issued: July 1, 2009.
By the Commission.
Judith M. Grady,
Acting 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
Schedule 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
[[Page 37555]]
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
[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
Royal Mail Group Inbound Air Parcel Post Agreement
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)
Priority Mail Contract 6 (MC2009-25 and CP2009-30)
Priority Mail Contract 7 (MC2009-25 and CP2009-31)
Priority Mail Contract 8 (MC2009-25 and CP2009-32)
Priority Mail Contract 9 (MC2009-25 and CP2009-33)
Priority Mail Contract 10 (MC2009-25 and CP2009-34)
Priority Mail Contract 11 (MC2009-27 and CP2009-37)
Priority Mail Contract 12 (MC2009-28 and CP2009-38)
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)
[[Page 37556]]
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. E9-18030 Filed 7-28-09; 8:45 am]
BILLING CODE 7710-FW-P
