New Standards for Domestic Mailing Services, 39477-39492 [2010-16810]

Agencies

• Postal Service

[Federal Register Volume 75, Number 131 (Friday, July 9, 2010)]
[Proposed Rules]
[Pages 39477-39492]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-16810]


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POSTAL SERVICE

39 CFR Part 111


New Standards for Domestic Mailing Services

AGENCY: Postal ServiceTM.

ACTION: Proposed rule.

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SUMMARY: In July 2010, the Postal Service filed a notice of mailing 
services price adjustments with the Postal Regulatory Commission (PRC), 
effective in January 2011. This proposed rule provides the mailing 
standards that would accompany the new prices in 2011.

DATES: We must receive comments on or before August 9, 2010.

ADDRESSES: Mail or deliver written comments to the Manager, Mailing 
Standards, U.S. Postal Service, 475 L'Enfant Plaza SW., Room 4446, 
Washington, DC 20260-4446. You may inspect and photocopy all written 
comments at USPS[supreg] Headquarters Library, 475 L'Enfant Plaza SW., 
11th Floor N, Washington, DC between 9 a.m. and 4 p.m., Monday through 
Friday. E-mail comments, containing the name and address of the 
commenter, may be sent to: MailingStandards@usps.gov, with a subject 
line of ``January 2011 Domestic Mailing Standards Proposal.'' Faxed 
comments are not accepted.

FOR FURTHER INFORMATION CONTACT: Bill Chatfield, 202-268-7278.

SUPPLEMENTARY INFORMATION: Proposed prices are or will be available 
under Docket Number(s) R2010-XX on the Postal Regulatory Commission's 
Web site at https://www.prc.gov.
    The Postal Service's proposed rule includes: Two incentive 
programs, several mail classification changes, modifications to 
mailpiece characteristics, and changes in classification terminology. 
This proposed rule contains the revisions to Mailing Standards of the 
United States Postal Service, Domestic Mail Manual (DMM[supreg]) that 
we would adopt to implement the new prices.

Incentive Programs

Reply Rides Free First-Class Mail Incentive Program

    The Postal Service encourages the growth of automation letter-size 
mail, particularly pieces that are part of full-service Intelligent 
Mail[supreg] automation mailings entered at PostalOne![supreg] 
acceptance facilities. Accordingly, we propose revised mailing 
standards to allow First-Class Mail letters weighing over 1 ounce up to 
1.2 ounces to qualify for postage payment at the 1-ounce price when 
those letters include a reply card or reply envelope under specified 
conditions.
    This new program provides an incentive for mailers to include more 
content in their automation First-Class Mail letters by providing a 
postage credit as follows:
     Eligible letters must qualify for the full-service 
Intelligent Mail barcode discount and weigh more than 1 ounce up to 1.2 
ounces. At the time of mailing, mailers would pay the applicable 2-
ounce price for these pieces. All commercial (presorted and automation) 
First-Class Mail letter-size volume counts towards meeting the overall 
mail volume threshold, but only those letters qualifying for the full-
service Intelligent Mail barcode discount will be eligible for postage 
credit.
     Letters must include a reply card or envelope, either 
Business Reply Mail[supreg] or Courtesy Reply MailTM. The 
reply piece may be in the format of a reusable envelope. Permit reply 
mail pieces are not eligible for this program.
     The postage credit would be for the amount paid for the 
second ounce and would be provided for those pieces mailed during the 
2011 program period when the mailer's volume of commercial First-Class 
Mail (FCM) letter-size mailpieces mailed in 2011 is at least 2.5 
percent greater than the mailer's trend of commercial FCM letter-size 
volume mailed during USPS fiscal year 2010 (October 1, 2009 through 
September 30, 2010) compared with volume mailed in USPS fiscal year 
2009 (October 1, 2008 through September 30, 2009). The threshold volume 
for program postage credit eligibility will be the total amount that is 
2.5 percent greater than the mailer's projected volume based on the 
mailer's trend. For example, if a mailer's letter-size volume has 
declined from 100,000 to 95,000 pieces (a 5 percent decline) from 2009 
to 2010, the projected volume for 2011 at the same trend would be 
90,250. That mailer's volume must be at least 92,507 (1.025 times 
90,250) during the program period to meet the eligibility threshold. 
Similarly, a mailer with a positive trend would have a threshold that 
is 2.5 percent more than their volume trend. The credit would be 
provided after the end of the program, upon calculation and 
verification of the mail volume data.
     Mailers who did not mail commercial First-Class Mail 
letters in fiscal year 2009 may not participate in the Reply Rides Free 
program.
     The program period will be from January 2, 2011 through 
December 31, 2011.
    Mail owners, but not mail service providers, who have mailed 
commercial First-Class Mail letters during USPS fiscal years (FY) 2009 
and 2010 may apply to participate in this incentive program by 
following instructions provided on our Web site: https://www.usps.com/firstclassmailincentive, beginning November 1, 2010, but no later than 
December 31, 2010. Mail owners must validate that they have mailed or 
intend to mail at least one commercial presorted or automation mailing 
of First-Class Mail letters during each of calendar years 2009 and 
2010, and should state their intent to mail First-Class Mail letters 
containing qualifying reply pieces weighing more than 1 ounce up to 1.2 
ounces during the 2011 program period. After registration, mail owners 
must supply adequate proof of the total qualifying mail volume claimed 
for USPS FY 2009 and FY 2010 in order to be eligible for participation.

2011 Saturation and High Density Incentive Program

    The Postal Service proposes to add new standards to the eligibility 
sections of DMM 243 and 343 describing an incentive program designed to 
increase the volume of Standard Mail and Nonprofit Standard Mail 
letters and flats mailed at saturation and high density prices. This 
program would encourage mailers to increase the volume within two of 
our highest margin products and would be open to all mailers meeting 
the basic eligibility requirements. The program would enable customers 
to expand mailing to additional markets, test new mailpieces, and 
increase the frequency of their mailings at reduced net postage prices.
    Mailers of Standard Mail or Nonprofit Standard Mail letters and/or 
flats (complete mailpieces) applying for participation in the program 
would have to meet the eligibility requirements for participation in 
the price category selected. Mailers meeting the eligibility criteria 
would be able to participate in both the saturation and high density 
categories simultaneously. Participants would have the option to 
demonstrate growth in total mailed volume or growth within a defined 
market. Mailers who participate only within defined market areas would 
be required to demonstrate volume growth within a specific, or group of 
specific, USPS sectional center

[[Page 39478]]

facility (SCF) service area(s) to qualify for the incentive. 
Participants would have the option to select one or more, up to a 
maximum of 20, individual SCF areas or up to five metropolitan target 
markets (consisting of multiple contiguous SCFs), for participation in 
the program, and would be required to meet the eligibility requirements 
for each area selected. The USPS would approve all applicant-selected 
market areas prior to acceptance into the program.
    Franchisees that are not separate business entities would not be 
able to apply for an incentive independently of the parent 
organization. Applicants would receive a credit for volume 
demonstrated, within their selected growth area and price category, 
above their USPS-determined threshold. The program period would be from 
January 2, 2011 through December 31, 2011.
    To participate, mailers must be the permit holder (i.e., owner) of 
a permit imprint advance deposit account(s) at a postal facility having 
PostalOne! capability or the owner of qualifying mail volume entered 
through the permit imprint advance deposit account of a mail service 
provider at a postal facility having PostalOne! capability. Only the 
volume of the mail owner, usually defined as the entity paying for the 
postage, would be eligible within the program period or to meet 
eligibility requirements. Mail service providers and customers 
supplying inserts, enclosures, or other components included in the 
saturation or high density mailings of another mailer would not be 
eligible to participate in this program.
    Standard Mail or Nonprofit Standard Mail letters and/or flats 
(complete mailpieces) mailed through a permit imprint advance deposit 
account, precanceled stamp permit, or a postage evidencing system owned 
by a mail service provider may be included as volume within the 
program, and towards program eligibility, when adequate documentation 
demonstrates that the applicant is the owner of the mail.
    As applicable, applicants would be required to submit postage 
statements and mailing documentation electronically to the Postal One! 
system for the duration of the program period. Applicants participating 
within a defined market area(s) would be required to submit postage 
statements and mailing documentation electronically to the Postal One! 
using Mail.dat or Mail.XML. All other applicants may optionally submit 
postage statements via Postal Wizard.
    For either the saturation or high density incentive, applicants 
would be required to demonstrate a combined minimum of six saturation 
or high density mailings within the period of October 1, 2009 to 
September 30, 2010. Applicants meeting the other eligibility criteria 
would have the option to participate in both price categories 
simultaneously. Applicants who choose to participate only within 
defined market areas would be required to meet the eligibility criteria 
independently for each selected SCF service area or selected 
metropolitan target market.
    Mail owners participating in the 2011 Saturation and High Density 
Incentive Program would not be eligible for concurrent participation in 
any other Postal Service-sponsored, volume incentive program that 
includes Standard Mail pieces in the saturation or high density price 
categories.
    Thresholds for the 2011 Saturation and High Density Incentive 
Program would be set at five percent (5%) above the volume of Standard 
Mail or Nonprofit Standard Mail letters and/or flats recorded in the 
2010 calendar year, within each participant-selected growth area and 
price category. Applicants electing to participate in both the 
saturation and high density price categories would be required to 
exceed the combined thresholds of both categories before qualifying for 
an incentive payment in either category.
    Approved program participants demonstrating an increase, above 
their threshold level, in their total Standard Mail or Nonprofit 
Standard Mail letters and/or flats volume, within their total market 
area, selected SCF service areas, or metropolitan target market, would 
qualify for a credit to a single designated permit imprint advance 
deposit account or Centralized Account Payments System (CAPS) account, 
following the close of the 2011 Saturation and High Density Incentive 
Program. The total postage paid for Standard Mail letters and flats 
within the program period would be identified for each participant and 
divided by the total number of recorded pieces, to generate the average 
price per piece. Participants would receive a credit in the amount of a 
percentage of the average price per piece, for the total number of 
mailpieces of their incremental volume above their threshold level, 
recorded during the program period as follows:

------------------------------------------------------------------------
                                                              Nonprofit
              Participation level                 Standard     standard
                                                    mail         mail
------------------------------------------------------------------------
Saturation....................................          22%           8%
High Density..................................          13%           8%
------------------------------------------------------------------------

Program Administration

    Those mailers identified by the Postal Service as being eligible to 
participate in the program would be sent an invitation letter on or 
before November 1, 2010. These invitation letters would direct mailers 
to apply for the program online at https://www.usps.com/SaturationHD. 
Mailers wishing to participate in the program, but who were not 
notified by letter, would be able to request a review of their 
eligibility by contacting the USPS no later than December 1, 2010 at 
SaturationHDIncentive@usps.gov. Any mailer wishing to participate in 
the program would be required initially to apply online no later than 
December 15, 2010.
    Mailers completing the online application process would receive an 
electronic response from the USPS that includes:
     An individual volume threshold report.
     A certification letter.
     A threshold inquiry form.
    The individual threshold report would display the applicant's USPS-
recorded saturation and/or high density mail volume for the 2010 
calendar year. Applicants agreeing with their threshold volume(s) would 
have the option to sign the provided certification letter and return a 
copy via email or mail a hardcopy to Saturation Incentive Program 
Office, 475 L'Enfant Plaza SW., RM 5500, Washington, DC 20260-5500, to 
register for the program. Applicants not agreeing with any portion of 
their USPS-calculated threshold(s) would be required to complete the 
threshold inquiry form along with supporting evidence and return it, 
via email or mail hardcopy, no later than March 15, 2011.
    In addition to Standard Mail volume prepared and entered directly 
by the mailer (applicant), applicants would also be eligible to 
participate in the program with qualifying volume prepared by a mail 
service provider when entered through a permit owned by the applicant. 
Mail volume entered through a mail service provider's permit would also 
qualify for the program if adequate documentation, such as a postage 
statement, PS Form 3602-R or PS Form 3602-N, identifies the mail as 
being prepared on behalf of the applicant and demonstrates the 
applicant's 2010 mailing activity.
    Additionally, as part of the program administration, the Postal 
Service would require each program participant to certify the data used 
to calculate the participant's program threshold(s). This certification 
requirement would be similar to that currently used on a postage 
statement (PS Form 3602-R or

[[Page 39479]]

3602-N), and is designed to ensure that the data used by the Postal 
Service to calculate the threshold level(s) are accurate.

Proposed Changes for Letters and Flats

Move Update Tolerance

    We propose to change the tolerance for First-Class Mail and 
Standard Mail pieces, found through a Performance-Based Verification 
procedure to be lacking an update via Move Update procedures, from the 
current 30 percent to a 25 percent tolerance before we charge a 7-cent 
per piece assessment charge. The Move Update standards, applicable to 
commercial mailings of First-Class Mail and Standard Mail mailpieces, 
are designed to reduce the number of mailpieces that require 
forwarding, return, or disposal as waste, thus reducing Postal Service 
costs. The standards also help to assure that mail reaches its intended 
recipients in a timely manner.
    Performance-Based Verification (PBV) procedures introduced in 2009 
allow the Postal Service to sample mailings during the acceptance 
process to compare mailpiece addresses with the National Change of 
Address (NCOA[supreg]) database. For the Move Update portion of PBV, 
addresses on the verification sample are compared to the NCOA database 
and the ratio of the number of failed changes of address (COAs), 
addresses that should have been updated per Postal Service records, to 
the number of actual COAs (all changed addresses for addresses in the 
mailing) is calculated. Currently, if this ratio for the sample is 
sufficiently high (30 percent or more), pieces in a First-Class Mail or 
Standard Mail mailing are subject to additional postage (the Move 
Update assessment charge).
    In a Federal Register final rule published October 27, 2009 (74 FR 
55140-55142), we stated: ``We will analyze the results of the PBV 
samples periodically, and will adjust the tolerance as needed to ensure 
the effectiveness of mailers' Move Update processes.'' Accordingly, the 
Postal Service proposes to change the current 30 percent tolerance to 
25 percent before a Move Update assessment postage charge would be 
incurred.

Standard Mail Letters Only

    Currently, nonbarcoded or nonautomation-compatible Standard 
Mail[supreg] letters that are mailed at saturation or high density 
prices pay the corresponding nonautomation Standard Mail flats prices. 
This causes confusion for both customers and employees regarding mail 
preparation and sortation. For example, mailers often ask if they can 
enter nonautomation saturation or high density letters at destination 
delivery unit (DDU) prices, which is allowed for flats but not for 
letters that are paid for at flats prices. Similar confusion exists 
regarding the prices for nonmachinable letters weighing more than 3.3 
ounces, which default to nonautomation flats prices.
    To reduce confusion, we propose to change the terminology used for 
the pricing of nonbarcoded and/or nonautomation-compatible saturation 
and high density letters from the current default flat-size pricing by 
establishing a separate price table with nonautomation letter prices 
for those pieces. Prices will be the same as for saturation and high 
density flats. Similarly, we also propose to use ``nonmachinable letter 
prices'' to refer to nonmachinable letters weighing more than 3.3 
ounces, instead of using the current terminology of nonautomation flats 
prices for nonmachinable letters. As is currently the case, 
nonmachinable letters over 3.3 ounces will have the same prices as 
nonautomation flats over 3.3 ounces, but the prices will be called 
nonmachinable letter prices. Actual prices will be published in a 
separate Federal Register notice, or may be found under Docket No. 
R2010-XX on the PRC Web site.

Standard Mail Flats

    We have found that rigid flat-size pieces are generally less 
efficient to handle than nonrigid flats, even when they are able to be 
sorted by our flat-sorting machines. Therefore, as announced in March 
2010, we propose to eliminate the current option for rigid flats to be 
eligible for automation prices if they pass a Pricing and 
Classification Service Center (PCSC)-administered testing process.

Proposed Changes for Parcels

First-Class Mail Parcels

    We propose to establish a separate price category for commercial 
single-piece First-Class Mail[supreg] (FCM) parcels with prices lower 
than those for retail FCM parcels. Currently, mailers who presort a 
minimum of 500 FCM parcels pay single-piece prices for the residual 
portion of a presorted mailing after sorting to all required area 
distribution centers. We would also allow non-presort mailers access to 
those prices, with no volume minimum per mailing. Mailers would be able 
to pay commercial single-piece FCM prices for their parcels when they 
pay postage by any of three methods: Permit imprint, information-based 
indicia (IBI) meters, or PC Postage.[supreg] Parcels with IBI-metered 
postage or PC postage must be marked ``COMM'' in addition to the First-
Class Mail marking. The ``COMM'' marking may be either within or 
directly below the indicia area.

Standard Mail Parcels

    Standard Mail parcels would be separated into two price categories, 
Marketing parcels and Fulfillment parcels. Each of the two price 
categories would have additional pricing separations for nonprofit 
pieces (Nonprofit Marketing parcels and Nonprofit Fulfillment parcels).
    Marketing parcels are defined as containing messages and/or product 
samples whose purposes are to encourage recipients to purchase a 
product or service, make a contribution, support a cause, form a belief 
or opinion, take an action, or provide information to recipients. These 
parcels would be required to bear an alternative addressing format 
(occupant or exceptional addressing, or simplified addressing when 
allowed for saturation mail), subject to DMM 602.3.0 and would be 
presented for mailing in carrier route (including carrier route basic, 
high-density, or saturation sortation) or presort separations. 
Presorted parcels would be prepared as either machinable or irregular 
parcels. All Marketing parcels would have a maximum size of 9 inches by 
12 inches by 2 inches thick.
    Fulfillment parcels are lightweight products typically requested by 
the addressees (recipients). These parcels would be prepared for 
mailing as either presorted machinable or irregular parcels.

Not Flat-Machinables (NFMs)

    In 2007, we created an NFM price category for Standard Mail items 
that could not meet revised automation flats standards. In the Federal 
Register on February 6, 2009 (74 FR 6250-6257), we announced our 
intention to discontinue the NFM category in May 2010. In the March 25, 
2010 Postal Bulletin (No. 22281), we announced that we would extend the 
NFM price category until the next price change. We now propose to end 
the NFM category as of January 2011. Pieces that would have been mailed 
as NFMs should qualify as either Standard Mail Fulfillment or Marketing 
parcels.

Other Parcels

    Parcel Post[supreg] packages will be zone priced for each pound 
increment including packages weighing up to 1 pound.

[[Page 39480]]

    Parcel Post, Bound Printed Matter (BPM), Media Mail,[supreg] and 
Library Mail single-piece parcel weights will be rounded off to two 
decimal places, instead of the current four decimal places.

Special and Other Services

Address Information System Products and Services

    Address Management at the USPS National Customer Support Center 
(NCSC) in Memphis, Tennessee, provides value-added product and service 
offerings that enable customers to better manage the quality of their 
mailing lists while maximizing the Postal Service's ability to deliver 
mail efficiently. Our proposed revision adds a comprehensive list, in 
DMM 509, of address information system products and services available 
from the NCSC. Existing services, such as address sequencing service or 
mailing list service, that customers obtain via the local Post 
OfficeTM or USPS District remain in DMM 507.

Discontinuation of Standard Mail Stamped Envelopes

    Standard Mail stamped envelopes will no longer be available for 
purchase. Based on reduced customer demand, the Postal Service has 
determined that these items be discontinued because alternatives are 
readily available.
    Stamped envelopes have been produced since 1853. In 1965, the U.S. 
Post Office Department first offered stamped envelopes specifically 
inscribed for authorized nonprofit mailers, denominated for the most-
used basic rate. In 1992, a Standard Mail bulk-rate envelope was added, 
and in 1995, both the nonprofit and bulk-rate envelopes were converted 
to nondenominational products to allow their use for the expanding 
variety of rates and subcategories. In 2002, the bulk-rate envelope was 
adjusted to include the preferred inscription ``Presorted Standard.'' 
Because of minimum mailing requirements, the sales of these envelopes 
were limited to box lots of 500 (except for philatelic sales).
    Sales for these Standard Mail envelopes have been declining over 
the past 10 years. More and more Standard Mail customers have opted to 
affix precanceled stamps or use permit imprints on commercially 
available envelopes. Since these alternatives are readily available, we 
propose to eliminate Standard Mail stamped envelopes from our schedules 
and inventory lists. The product numbers that will be eliminated are: 
215100, 215200, 262700, 262800, and 216400.

Post Office Box Handling Fee

    The Postal Service proposes to revise DMM 508.4.0 to expand the 
applicability of the lock replacement fee for Post Office boxes. 
Current standards require payment of the lock replacement fee when a 
customer requests that the lock be changed.
    The Postal Service proposes to also apply this fee when customers 
renew Post Office Box (PO BOXTM) service more than 10 days 
after the renewal due date. This will provide an incentive for 
customers to pay their PO BOX rental fees on time. For those customers 
who do not renew until after the 10-day grace period, the Postal 
Service often changes the lock or incurs other lock-related costs, such 
as plugging the lock and bundling mail separately for the PO BOX. The 
lock replacement fee also will be treated as a late payment fee, even 
in those cases in which the Postal Service does not actually change the 
lock.

General

    We encourage customers to comment on the proposed changes and add 
that this proposed rule provides the opportunity for mailers to prepare 
for possible operation changes well ahead of the effective date.
    Although we are exempt from the notice and comment requirements of 
the Administrative Procedure Act [5 U.S.C. of 553 (b), (c)] regarding 
proposed rulemaking by 39 U.S.C. 410(a), we invite public comments on 
the following proposed revisions to Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM), incorporated by 
reference in the Code of Federal Regulations. See 39 CFR 11.1.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

    Accordingly, 39 CFR Part 111 is proposed to be amended as follows:

PART 111--[AMENDED]

    1. The authority citation for 39 CFR Part 111 continues to read as 
follows:

    Authority:  5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-
1737:39 U.S.C. 101, 401, 403, 404, 414, 416, 3001-3011, 3201-3219, 
3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.

    2. Revise the following sections of Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM), as follows:

100 Retail Letters, Cards, Flats, and Parcels

* * * * *

150 Parcel Post

153 Prices and Eligibility

1.0 Parcel Post Prices and Fees

* * * * *

1.2 Determining Single-Piece Weight

    [Revise the last sentence of 1.2 to read as follows:]
    * * * Express all single-piece weights in decimal pounds rounded 
off to two decimal places.
* * * * *

200 Commercial Letters and Cards

201 Physical Standards

* * * * *

2.0 Physical Standards for Nonmachinable Letters

* * * * *

2.3 Additional Criteria for Standard Mail Nonmachinable Letters

    [Revise 2.3 to read as follows:]
    The nonmachinable prices in 243.1.0 apply to Standard Mail letter-
size pieces that have one or more of the nonmachinable characteristics 
in 2.1. Mailers must prepare all nonmachinable letters as described in 
245.5.0.
* * * * *

230 First-Class Mail

233 Prices and Eligibility

* * * * *

3.0 Basic Standards for First-Class Mail Letters

* * * * *

3.5 Move Update Standards

* * * * *
    [Revise title and text of 3.5.4 to read as follows:]

3.5.4 Basis for Move Update Assessment Charges

    Mailings are subject to a Move Update assessment charge if more 
than 25 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 25 percent failed COAs out of the 
total COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 25 percent.

[[Page 39481]]

    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 35% of COAs in the sample are not updated, 
then the charge is applied to 10% (=35%-25%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *
    [Add new 7.0 to read as follows:]

7.0 First-Class Mail Incentive Programs

7.1 General Description

    First-Class Mail incentive programs are designed to encourage mail 
volume growth and retention.

7.2 Reply Rides Free Program

    The Reply Rides Free program provides an incentive for mailers to 
include additional contents in their full-service automation (see 
705.22) First-Class Mail letters by providing a postage credit for 
letters weighing over 1 ounce but no more than 1.2 ounces.

7.2.1 Basic Mailpiece Eligibility

    Letter-size mailpieces mailed by an approved program participant 
are eligible for a postage credit under all of the following 
conditions:
    a. Eligible full-service automation letters must weigh more than 1 
ounce but no more than 1.2 ounces. Mailers pay the applicable 2-ounce 
price for these pieces.
    b. Letters must include a reply card or envelope, either Business 
Reply Mail or Courtesy Reply Mail. The reply piece may be part of a 
reusable envelope prepared according to 601.6.4 or 601.6.5. Mailers 
must provide a sample of the reply card or envelope at the time of 
mailing.
    c. The postage credit is for the amount paid for the second ounce 
for eligible letters that meet the standards in 7.2, that are mailed 
during the 2011 program period, and that meet or exceed their USPS-
determined threshold volume for 2011. To be eligible for program 
participation, a mailer must have mailed at least one mailing of 500 or 
more presorted or automation First-Class Mail letters during the USPS 
fiscal years (FY) 2009 and 2010 (October 1 through September 30). The 
threshold volume is determined as follows:
    1. The USPS determines a mailing volume trend for mailers with all 
commercial First-Class Mail letter volume mailed during both USPS FY 
2009 and USPS FY 2010. To qualify for postage credit, the mailing 
volume in 2011 must be at least 2.5 percent greater than the projected 
mail volume based on the volume trend percentage from FY 2009 to FY 
2010. For example, if a mailer's letter-size volume has declined from 
100,000 to 95,000 pieces (a trend of 5 percent decline) from USPS FY 
2009 to USPS FY 2010, that mailer's projected volume for 2011 would be 
95,000 pieces times .95 (90,250). The actual volume mailed (threshold 
volume) during calendar year 2011 must be at least 92,507 pieces (1.025 
times 90,250, the projected volume) during the program period.
    2. The credit is provided after the end of the program period, upon 
USPS calculation and verification of the mail volume data.
    d. The program period for eligible mail volume is from January 2, 
2011 through December 31, 2011. Mailed volumes are calculated at the 
end of the program period, comparing the volume mailed during the 
program with the threshold volume. To be eligible for any postage 
credit, the participant must ensure that the total volume of First-
Class Mail commercial letters paid at presorted or automation letters 
prices mailed during the 2011 program period meets or exceeds the USPS-
determined threshold volume for 2011, as determined under 7.2.1c.

7.2.2 Mailer Participation Eligibility and Documentation

    Mail service providers are not eligible to participate in this 
program. Mail owners are considered eligible for the program as 
follows:
    a. Applicants must have mailed at least one presorted or automation 
First-Class Mail mailing of 500 letters or more during both USPS FY 
2009 and FY 2010. Applicants must be able to document their total 
mailed volume of commercial First-Class Mail letters for calendar years 
2009 and 2010, as follows:
    1. Volume through one or more permit imprint advance deposit 
accounts, precanceled stamp permits, or postage meter permits owned by 
the applicant, or
    2. Volume prepared by a mail service provider when entered through 
a permit owned by the applicant, or
    3. Volume mailed under a mail service provider's permit that can be 
specifically identified as being mailed on behalf of the applicant.
    b. Approved participants must be able to document the total mailed 
volume of letters that are eligible, under 7.2, for postage credit. 
Accordingly, pieces must be presented for mailing under either of the 
following conditions:
    1. A separate mailing of identical weight pieces, all of which 
weigh more than 1 ounce up to 1.2 ounces.
    2. A mailing of nonidentical weight pieces, supported by 
documentation under the manifest mailing standards in 705.2.0, with 
individual piece weight listings substantiating that participant pieces 
weigh more than 1 ounce but no more than 1.2 ounces. The manifest 
listing must also provide a total of eligible pieces.
    c. At the end of the 2011 program period, approved participants 
must be able to document their total mailed volume of commercial First-
Class Mail letters during the program period, the total mail volume 
eligible for postage credit under 7.2.2b, and meet the following 
conditions:
    1. Letters mailed in the 2011 program period that meet the USPS-
determined mail volume threshold for 2011, as provided in 7.2.1c, must 
weigh more than 1 ounce up to a maximum of 1.2 ounces.
    2. Letters mailed during the 2011 program period must contain a 
reply card or reply envelope.
    3. Credit applies only to letters mailed under the full-service 
automation option in 705.22.
    d. Fluctuations in mailing activity resulting from the merger or 
acquisition of one or more program participants, prior or subsequent to 
the beginning of the program period, are subject to review, possible 
recalculation of thresholds, and approval by the USPS.
    e. Mailers participating in the Reply Rides Free incentive program 
are not eligible for concurrent participation in any other USPS-
sponsored volume incentive program that includes First-Class Mail 
letters.

7.2.3 Application

    Mail owners wishing to participate may apply at https://www.usps.com/firstclassmailincentive beginning November 1, 2010, but no 
later than December 31, 2010. Following registration, mailers are 
required to provide documentation demonstrating their total commercial 
First-Class Mail letter volume mailed during USPS FY 2009 and FY 2010 
(as described in 7.2.1c). The USPS reviews the documentation provided 
for adequacy and provides an electronic response that includes:
    a. Notification of approval (or of the need for additional 
documentation) for participation in the program.
    b. Applicant's verified mail volume for USPS FY 2009 and FY 2010.
    c. Applicant's 2011 mail volume threshold for program and postage 
credit eligibility.

[[Page 39482]]

    d. A certification letter. Mailers must present a printed copy of 
the certification letter to a postal acceptance employee with the first 
mailing, under this program, at each mailing office.

7.2.4 Mailer Response

    Mailers wishing to dispute the USPS-verified mail volume or USPS-
determined threshold (see 7.2.3) may request a review by sending an e-
mail to (e-mail address to be published later) no later than February 
15, 2011.

7.2.5 Program Credits

    Approved participants that can demonstrate an increase in their 
mailed volume of commercial First-Class Mail letters in the 2011 
program period, compared with the projected volume as determined under 
7.2.1c, qualify for a credit, after the end of the program period, to 
their designated Centralized Account Payment System (CAPS) permit 
imprint account, as follows:
    a. The letter-size pieces for which the credit is claimed must 
weigh more than 1 ounce but no more than 1.2 ounces and be mailed under 
all standards in 7.2.
    b. Participants that meet or exceed their threshold volume receive 
a credit in the amount of the postage paid for the second ounce for 
each eligible piece meeting all the conditions in 7.2 that are mailed 
during the 2011 program year from January 2, 2011 through December 31, 
2011.
* * * * *

240 Standard Mail

243 Prices and Eligibility

1.0 Prices and Fees for Standard Mail

* * * * *
    [Delete section 1.7 in its entirety to remove reference to the 2009 
Saturation Mail Volume Incentive Program.]

3.0 Basic Standards for Standard Mail Letters

* * * * *

3.2 Defining Characteristics

3.2.1 Mailpiece Weight

    All Standard Mail pieces must weigh less than 16 ounces. The 
following weight limits also apply to pieces mailed at Standard Mail 
letter prices:
    [Revise items a and b to read as follows:]
    a. Pieces mailed at machinable letter prices may weigh up to 3.3 
ounces. Letter-size pieces weighing more than 3.3 ounces are mailable 
at nonmachinable letter prices, unless they are barcoded and eligible 
to be mailed as automation letters. For saturation and high density 
letters over 3.5 ounces, see 3.2.1b.
    b. Pieces mailed at automation letter prices may weigh up to 3.5 
ounces. Saturation and high density letters weighing more than 3.5 
ounces are mailable at applicable saturation or high density 
nonautomation letter prices.
* * * * *

3.9 Move Update Standards

* * * * *

3.9.4 Basis for Move Update Assessment Charges

    [Revise text of 3.9.4 to read as follows:]
    Mailings are subject to a Move Update assessment charge if more 
than 25 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 25 percent failed COAs out of the 
total COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 25 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 35% of COAs in the sample are not updated, 
then the charge is applied to 10% (=35%-25%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *

5.0 Additional Eligibility Standards for Nonautomation Standard Mail 
Letters

* * * * *

5.5 Nonmachinable Price Application

    [Revise 5.5 to read as follows:]
    Nonmachinable prices in 1.0 apply only to Standard Mail letter-size 
pieces (including card-size pieces) that meet the criteria in 201.2.1 
for nonmachinable letters. Nonmachinable saturation or high density 
letter-size pieces are subject to the applicable saturation or high 
density nonautomation letter prices.
* * * * *

6.0 Additional Eligibility Standards for Enhanced Carrier Route 
Standard Mail Letters

6.1 General Enhanced Carrier Route Standards

* * * * *

6.1.2 Basic Eligibility Standards

    All pieces in an Enhanced Carrier Route or Nonprofit Enhanced 
Carrier Route Standard Mail mailing must:
* * * * *
    [Revise item g to read as follows:]
    g. Meet the requirements for automation compatibility in 201.3.0 
and bear an accurate delivery point POSTNET barcode or Intelligent Mail 
barcode encoded with the correct delivery point routing code matching 
the delivery address and meeting the standards in 202.5.0, and 708.4.0, 
except as provided in 6.1.2h. Pieces prepared with a simplified address 
format are exempt from the automation-compatibility and barcode 
requirements. Letters with Intelligent Mail barcodes entered under the 
full-service Intelligent Mail automation option also must meet the 
standards in 705.22.0.
    [Add new item h to read as follows:]
    h. All saturation and high density letters over 3.5 ounces, and 
saturation (other than pieces with a simplified address) and high 
density letter-size pieces not meeting the standards 6.1.2g must pay 
the applicable nonautomation saturation or high density prices. Basic 
carrier route letter prices are the same for barcoded automation-
compatible pieces and nonautomation pieces.
    [Delete 6.1.3 in its entirety.]
* * * * *

6.3 Basic Price Enhanced Carrier Route Standards

* * * * *

6.3.2 Basic Price Eligibility

    [Revise 6.3.2 by deleting items a and b to read as follows:]
    Basic prices apply to each piece sorted under 245.6.0 or 705.8.0 in 
a full carrier route tray, in a carrier route bundle of 10 or more 
pieces, or in groups of 10 or more pieces placed in a 5-digit carrier 
routes or a 3-digit carrier routes tray.

6.4 High Density Enhanced Carrier Route Standards

6.4.1 Basic Eligibility Standards for High Density Prices

    [Revise 6.4.1, by deleting items a and b and incorporating those 
items into the text to read as follows:]
    High density letter-size mailpieces must be in a full carrier route 
tray or in

[[Page 39483]]

a carrier route bundle of 10 or more pieces placed in a 5-digit carrier 
routes or 3-digit carrier routes tray. High density prices apply to 
each piece that is automation-compatible according to 201.3.0, and has 
an accurate delivery point POSTNET barcode or Intelligent Mail barcode 
encoded with the correct delivery point routing code matching the 
delivery address and meeting the standards in 202.5.0, and 708.4.0. 
Except for pieces with a simplified address, pieces that are not 
automation-compatible or not barcoded are mailable only at the 
nonautomation high density letter prices.
* * * * *

6.4.3 High Density Discount for Heavy Letters

    [Revise 6.4.3 to read as follows:]
    High density pieces that are automation-compatible under 201.3.0, 
that are accurately barcoded with a delivery point barcode, and that 
weigh more than 3.3 ounces but not more than 3.5 ounces, pay postage 
equal to the piece/pound price and receive a discount equal to the high 
density flat-size piece price (3.3 ounces or less) minus the high 
density letter piece price (3.3 ounces or less). The discount is 
calculated using nondestination entry prices only, regardless of entry 
level. This discount does not apply to pieces paying nonautomation high 
density letter prices.

6.5 Saturation ECR Standards

6.5.1 Basic Eligibility Standards for Saturation Prices

    [Revise 6.5.1 by deleting items a through c and incorporating those 
items into the text to read as follows:]
    Saturation letter-size mailpieces must be in a full carrier route 
tray or in a carrier route bundle of 10 or more pieces placed in a 5-
digit carrier routes or 3-digit carrier routes tray. Saturation prices 
apply to each piece that is automation-compatible according to 201.3.0, 
and has an accurate delivery point POSTNET barcode or Intelligent Mail 
barcode encoded with the correct delivery point routing code matching 
the delivery address and meeting the standards in 202.5.0, and 708.4.0. 
Except for pieces with a simplified address, pieces that are not 
automation-compatible or not barcoded are mailable at nonautomation 
saturation letter prices.
* * * * *

6.5.3 Saturation Discount for Heavy Letters

    [Revise 6.5.3 to read as follows:]
    Saturation pieces that are automation-compatible under 201.3.0, are 
accurately barcoded with a delivery point barcode, and weigh more than 
3.3 ounces but not more than 3.5 ounces pay postage equal to the piece/
pound price and receive a discount equal to the saturation flat-size 
piece price (3.3 ounces or less) minus the saturation letter piece 
price (3.3 ounces or less). The discount is calculated using 
nondestination entry prices only, regardless of entry level. This 
discount also applies to saturation pieces with simplified addresses. 
This discount does not apply to pieces paying nonautomation saturation 
letter prices.
* * * * *
    [Add new section 8.0 to read as follows:]

8.0 Incentive Programs for Standard Mail Letters

8.1 General Description

    Incentive programs for Standard Mail letters are designed to 
encourage mail volume growth and retention.

8.2 Saturation and High Density Incentive Program

    The Saturation and High Density Incentive Program provides postage 
credits for qualified mail owners of Standard Mail, or Nonprofit 
Standard Mail, letters and/or flats mailed at saturation or high 
density carrier route prices that can document mail volumes exceeding 
their individual USPS-recorded threshold level, during the 2011 program 
period, from January 2, 2011, through December 31, 2011. Participating 
mail owners documenting volumes above their threshold level receive a 
credit, for each piece exceeding their threshold level, to a designated 
permit imprint advance deposit account or Centralized Account Payment 
System (CAPS) account after the end of the program period. Refer to 
343.8.2 for program details.
* * * * *

300 Commercial Mail Flats

301 Physical Standards

* * * * *

3.0 Physical Standards for Automation Flats

* * * * *
    [Delete 3.3 in its entirety, and renumber current 3.4 through 3.6 
as new 3.3 through 3.5.]
* * * * *

330 First-Class Mail

333 Prices and Eligibility

* * * * *

3.0 Eligibility Standards for First-Class Mail Flats

* * * * *

3.5 Move Update Standard

* * * * *
    [Revise title and text of 3.5.4 to read as follows:]

3.5.4 Basis for Move Update Assessment Charges

    Mailings are subject to a Move Update assessment charge if more 
than 25 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 25 percent failed COAs out of the 
total COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 25 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 35% of COAs in the sample are not updated, 
then the charge is applied to 10% (=35%-25%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *

340 Standard Mail

343 Prices and Eligibility

1.0 Prices and Fees for Standard Mail

* * * * *
    [Delete section 1.6 in its entirety to remove reference to the 2009 
Saturation Mail Volume Incentive Program.]
* * * * *

3.0 Basic Standards for Standard Mail Flats

* * * * *

3.9 Move Update Standards

* * * * *
* * * * *
    [Revise title and text of 3.9.4 to read as follows:]

3.9.4 Basis for Move Update Assessment Charges

    Mailings are subject to a Move Update assessment charge if more 
than 25 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during

[[Page 39484]]

Performance-Based Verification. Specifically, mailings for which the 
sample contains greater than 25 percent failed COAs out of the total 
COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 25 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 35% of COAs in the sample are not updated, 
then the charge is applied to 10% (=35%-25%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *
    [Add new 8.0 as follows:]

8.0 Incentive Programs for Standard Mail Flats

8.1 General Description

    Incentive programs for Standard Mail letters are designed to 
encourage mail volume growth and retention.

8.2 Saturation and High Density Incentive Program

8.2.1 Program Description

    The Saturation and High Density Incentive Program provides postage 
credits for qualified mail owners of Standard Mail, or Nonprofit 
Standard Mail, letters and/or flats (complete mailpieces) mailed at 
saturation or high density carrier route prices that can document mail 
volumes exceeding their individual USPS-recorded threshold level, 
during the 2011 program period, from January 2, 2011, through December 
31, 2011. Participating mail owners documenting volumes above their 
threshold level receive a credit, for each piece exceeding their 
threshold level, to a single designated permit imprint advance deposit 
account or Centralized Account Payment System (CAPS) account after the 
end of the program period. Applicants are required to review and 
certify the accuracy of the data used by the USPS to calculate their 
threshold level(s); and, upon request, may be required to provide 
documentation of their mailing activity in the 2010 calendar year, the 
2009-2010 eligibility period and during the program period.

8.2.2 Eligibility Standards

    Mail service providers are not eligible to participate in this 
program. Mail owners are eligible for the program as follows:
    a. Mailers must be the owner of a permit imprint advance deposit 
account, precanceled stamp permit, or postage meter permit at a USPS 
facility having PostalOne! capability; or the owner of qualifying 
mailpiece volume entered through the account(s) of a mail service 
provider at a USPS facility having PostalOne! capability, when adequate 
documentation demonstrates that the applicant is the owner of the 
mailpieces.
    b. Applicants must electronically submit postage statements and 
mailing documentation to the Postal One! system. Applicants 
participating within a defined market area(s) must electronically 
submit postage statements and mailing documentation using Mail.dat or 
Mail.XML. All other applicants may optionally submit postage statements 
via Postal Wizard.
    c. Only the volume of the mail owner, usually defined as the entity 
paying for the postage, is eligible within the program period.
    d. Mail service providers and customers supplying inserts, 
enclosures or other components included in the mailings of another 
mailer are not eligible to participate in this program.
    e. For either the saturation or high density incentives, applicants 
must demonstrate a combined minimum of six saturation or high density 
mailings of Standard Mail letters and/or flats within the qualification 
period of October 1, 2009, to September 30, 2010.
    f. Applicants meeting the eligibility criteria in 8.2.2a through 
8.2.2d may participate within both the saturation and high density 
price categories simultaneously.
    g. Applicants who participate only within defined market areas must 
meet the eligibility criteria independently for each selected SCF 
service area or selected metropolitan target market.
    h. Mailers participating in the 2011 Saturation and High Density 
Incentive Program are not eligible for concurrent participation in any 
other USPS-sponsored volume incentive program that includes Standard 
Mail pieces in the saturation or high density price categories.

8.2.3 Program Threshold Level

    Threshold level figures are calculated independently for each 
applicant as follows:
    a. Thresholds are set at five percent (5%) above (or 105% of) the 
volume, within the participant-selected growth area and price category, 
of Standard Mail or Nonprofit Standard Mail letters and/or flats 
recorded in the 2010 calendar year.
    b. Applicants participating in both the saturation and high density 
price categories must exceed the combined thresholds of both categories 
before qualifying for an incentive payment in either category.

8.2.4 Application

    Mail owners identified by the Postal Service as being eligible to 
participate in the program will be sent an invitation letter by 
November 1, 2010. Mail owners may apply for the program as follows:
    a. The invitation letter directs mail owners to apply for the 
program online at https://www.usps.com/SaturationHD no later than 
December 15, 2010.
    b. Applicants participating with Standard Mail saturation and/or 
high density mail volume destinating only within defined market areas 
must select the sectional center facility (SCF) service areas for 
participation in the program, up to a maximum of 20 individual SCF 
areas or up to five metropolitan target markets (consisting of multiple 
contiguous SCFs). The USPS must approve all applicant-selected market 
areas prior to acceptance into the program.
    c. Mail owners completing the online application process receive an 
electronic response from the USPS that includes:
    1. An individual volume threshold report, with the applicant's 
recorded saturation and/or high density volume for the 2010 calendar 
year.
    2. A certification letter.
    3. A threshold inquiry form.
    d. Applicants agreeing with their threshold volume(s) can sign the 
certification letter and return a copy via e-mail to: 
SaturationHDIncentive@usps.gov or mail hardcopy to Saturation Incentive 
Program Office, 475 L'Enfant Plaza, SW., Room 5500, Washington, DC 
20260-5500, to be registered for the program.
    e. Applicants not agreeing with any portion of their USPS-
calculated threshold(s) must complete the threshold inquiry form and 
return it along with supporting evidence, via e-mail, or mail hardcopy 
to Saturation Incentive Program Office, 475 L'Enfant Plaza, SW., Room 
5500, Washington, DC 20260-5500, no later than March 15, 2011.
    f. Mail owners wishing to participate in the program, but who were 
not notified by letter, may request a review of their eligibility by 
contacting the USPS no later than December 1, 2010.

8.2.5 Program Participation

    Mail owners may participate in the program with qualifying letters 
and/or

[[Page 39485]]

flats mailpieces mailed at saturation or high density prices as 
follows:
    a. Standard Mail, or Nonprofit Standard Mail, mailpieces mailed by 
the participant through the participant's own permit imprint advance 
account, precanceled stamp permit(s), or postage meter permit(s);
    b. Standard Mail, or Nonprofit Standard Mail, mailpieces prepared 
by a mail service provider, when entered through a permit owned by the 
participant;
    c. Standard Mail, or Nonprofit Standard Mail, mailpieces mailed 
through a mail service provider's permit, only when the pieces can be 
identified as being prepared for the participant and when the 
applicant's prior mailing activity through the mail service provider's 
permit can be validated.
    d. Fluctuations in mailing activity resulting from the merger or 
acquisition of one or more program participants, prior or subsequent to 
the beginning of the program period, are subject to review and approval 
by the USPS.

8.2.6 Incentive Program Credits

    Approved participants demonstrating an increase in Standard Mail, 
or Nonprofit Standard Mail, letters and flats volume above their 
threshold level qualify for a credit to a single designated permit 
imprint advance deposit account or Centralized Account Payment System 
(CAPS) account as follows:
    a. The total postage paid for Standard Mail, or Nonprofit Standard 
Mail, letters and flats mailed at saturation or high density prices, 
recorded during the program is identified for each participant.
    b. The total postage paid during the program period is divided by 
the total number of recorded mailpieces to determine the average price 
per piece for the program period.
    c. Participants receive a credit, based on the percentages of the 
average price per piece, for the number of mailpieces of incremental 
volume above their threshold level, recorded during the program period, 
as follows:
    1. Saturation letters and flats: 22 percent for Standard Mail, 8 
percent for Nonprofit Standard Mail pieces.
    2. High density letters and flats: 13 percent for Standard Mail, 8 
percent for Nonprofit Standard Mail pieces.
* * * * *

400 Commercial Parcels

401 Physical Standards

1.0 Physical Standards for Parcels

* * * * *

1.3 Maximum Weight and Size

    [Revise text of 1.3 by adding a new third sentence to read as 
follows:]
    * * * Standard Mail Marketing parcels (see 2.4) may not be larger 
than 9 inches high, 12 inches long and 2 inches thick. * * *
* * * * *

2.0 Additional Physical Standards by Class of Mail

* * * * *

2.3 First-Class Mail Parcels

* * * * *

2.3.2 Surcharge

    Unless prepared in 5-digit/scheme containers or paid at a single-
piece price, presorted parcels are subject to a surcharge if any of the 
following characteristics apply:
    [Revise 2.3.2 by deleting current item a and redesignating current 
items b and c as new items a and b to read as follows:]
    a. The parcels do not bear a GS1-128 or POSTNET barcode.
    b. The parcels are irregularly shaped, such as rolls, tubes, and 
triangles.
* * * * *
    [Revise the title of 2.4 to read as follows:]

2.4 Standard Mail Parcels

* * * * *
    [Revise title and text of 2.4.2 to delete references to Not Flat-
Machinables and add standards for Marketing parcels to read as 
follows:]

2.4.2 Marketing Parcels

    Marketing parcels have the following characteristics:
    a. Height not more than 9 inches high. Minimum height must be 3\1/
2\ inches if the parcel is \1/4\ inch thick or less.
    b. Length not more than 12 inches long. Minimum length must be 5 
inches if the parcel is \1/4\ inch thick or less.
    c. Thickness at least 0.009 thick, but not more than 2 inches.
    d. An alternative addressing format, according to 602.3.0.

2.4.3 Surcharge

    [Revise text of 2.4.3 to delete reference to Not Flat-Machinables 
and reorganize text to read as follows:]
    Unless prepared in carrier route or 5-digit/scheme containers, 
Standard Mail parcels are subject to a surcharge if:
    a. The machinable parcels do not bear a GS1-128 barcode (see 
708.5.0) or,
    b. The irregular parcels do not bear a GS1-128 barcode (see 
708.5.0) or POSTNET barcode (see 708.4.0).
* * * * *

402 Elements on the Face of a Mailpiece

1.0 All Mailpieces

* * * * *

1.2 Delivery and Return Address

    [Revise 1.2 by reorganizing the text and adding a new last sentence 
to read as follows:]
    The delivery address specifies the location to which the USPS is to 
deliver a mailpiece (see 602 for more information). Except for pieces 
prepared with detached address labels under 602.4.0, each mailpiece 
must have a visible and legible delivery address only on the side of 
the piece bearing postage. A return address is required in specific 
circumstances (see 3.2 and 602.1.5). Standard Mail Marketing parcels 
(see 443) must use an alternative addressing format under 602.3.0.
* * * * *

2.0 Placement and Content of Markings

* * * * *

2.4 First-Class Mail and Standard Mail Markings

    [Revise the title of 2.4.1 to read as follows:]

2.4.1 Placement and Content

    Markings must be placed as follows:
* * * * *
    [Revise item b to add a marking for First-Class Mail parcels and 
reorganize text to read as follows:]
    b. Other Markings. In addition to the basic class marking, 
nonpresorted First-Class Mail parcels claiming the single-piece 
commercial parcel price (see 433) must be marked ``COMM'' when postage 
is paid by IBI meter or PC postage. Price-specific markings for 
Standard Mail only are ``ECRLOT,'' ``ECRWSH,'' ``ECRWSS,'' and 
``Customized MarketMail'' (or ``CUST MKTMAIL'' or ``CMM''). Place 
price-specific markings in one of the following locations:
    1. In the location specified in 2.4.1a.
    2. In the address area on the line directly above or two lines 
above the address if the marking appears alone or if included in an 
optional endorsement line under 708.7.0 or with carrier route 
information under 708.6.0.
    3. If preceded by two asterisks (**), place ``PRESORTED'' or 
``Customized MarketMail'' (or abbreviated marking) on the line directly 
above or two lines above the address in a mailer keyline or manifest 
keyline, or above the address and below the postage in an MLOCR ink-
jet-printed date correction/meter drop shipment line.

[[Page 39486]]

    [Delete item c in its entirety and redesignate current item d as 
new item c.]
* * * * *

4.0 General Barcode Placement for Parcels

* * * * *

4.3 POSTNET Barcodes

    [Revise text of 4.3 by deleting references to Not Flat-Machinable 
pieces to read as follows:]
    First-Class Mail parcels and Standard Mail irregular parcels may 
bear POSTNET barcodes or GS1-128 barcodes. First-Class Mail parcels and 
Standard Mail irregular parcels bearing POSTNET barcodes representing 
only the postal routing barcode (destination ZIP Code) are eligible to 
be mailed using eVS. POSTNET barcodes may not be used on eVS parcels 
bearing concatenated GS1-128 barcodes. Place POSTNET barcodes on 
parcels under 4.3.1 through 4.3.3.

4.3.1 General Placement of POSTNET Barcodes

    [Revise text of 4.3.1 by deleting references to Not Flat-Machinable 
piece under 6 ounces to read as follows:]
    On any First-Class Mail parcel, or any Standard Mail irregular 
parcel, the POSTNET barcode may be anywhere on the address side as long 
as it is at least \1/8\ inch from any edge of the piece. POSTNET 
barcodes must be printed according to 708.4.0. Address block barcodes 
are subject to the standards in 4.3.2.
* * * * *

430 First-Class Mail

433 Prices and Eligibility

1.0 Prices and Fees for First-Class Mail

* * * * *
    [Revise text of 1.3 to add eligibility standards for the single-
piece commercial parcel price to read as follows:]

1.3 Parcel Prices

    For prices, see Notice 123-Price List. First-Class Mail parcels 
mailed under the following conditions are eligible for single-piece 
commercial parcel prices:
    a. The residual portion of a presorted mailing prepared under 
435.4.0.
    b. Nonpresorted mailings for which the postage is paid by permit 
imprint, IBI meter, or PC Postage. The minimum quantity per mailing 
when using permit imprints (see 604.5.0) is 200 pieces or 50 pounds. 
See 401.2.4 for required marking when postage is paid by IBI meter or 
PC Postage.
* * * * *

3.0 Basic Standards for First-Class Mail Parcels

* * * * *

3.5 Move Update Standards

* * * * *
    [Revise title and text of 3.5.4 to read as follows:]

3.5.4 Basis for Move Update Assessment Charges

    Mailings are subject to a Move Update assessment charge if more 
than 25 percent of addresses with a change of address (COA) are not 
updated, based on the error rate found in USPS sampling at acceptance 
during Performance-Based Verification. Specifically, mailings for which 
the sample contains greater than 25 percent failed COAs out of the 
total COAs are subject to additional postage charges as follows:
    a. The percentage of the mailing paying the charge is based on the 
percentage of failed pieces above 25 percent.
    b. Each of the assessed pieces is subject to the $0.07 per piece 
charge.
    c. As an example, if 35% of COAs in the sample are not updated, 
then the charge is applied to 10% (=35%-25%) of the total mailing.
    d. Mailings for which the sample has five or fewer pieces that were 
not updated for a COA are not subject to the assessment, regardless of 
the failure percentage.
* * * * *

440 Standard Mail

443 Prices and Eligibility

1.0 Prices and Fees for Standard Mail

* * * * *
    [Revise title of 1.2 to read as follows:]

1.2 Regular and Nonprofit Standard Mail--Fulfillment Parcel Prices

* * * * *
    [Revise title of 1.3 to read as follows:]

1.3 Regular and Nonprofit Standard Mail--Marketing Parcel Prices

* * * * *

3.0 Basic Standards for Standard Mail Parcels

* * * * *

3.3 Additional Basic Standards for Standard Mail

    Each Standard Mail mailing is subject to these general standards:
* * * * *
    [Revise text of item d to read as follows:]
    d. Each Fulfillment parcel must bear the addressee's name and 
delivery address, including the correct ZIP Code or ZIP+4 code, unless 
an alternative addressing format is used subject to 602.3.0. Detached 
address labels (DALs) may be used subject to 602.4.0.
    [Re-designate current items e through h as new items f through i, 
and add