Changes or Corrections to Mail Classification Schedule, 69781-69786 [2014-27589]

Download as PDF Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules (ii) Reimburse travel to and from official meetings of the overseas scouting committee upon approval from the appropriate combatant commander. (5) The total amount of NAF support for the scouting program must not exceed 70 percent of the total cost of the scouting program. Dated: November 18, 2014. Aaron Siegel, Alternate OSD Federal Register Liaison Officer, Department of Defense. [FR Doc. 2014–27665 Filed 11–21–14; 8:45 am] BILLING CODE 5001–06–P POSTAL REGULATORY COMMISSION 39 CFR Part 3020 [Docket No. RM2015–6; Order No. 2250] Changes or Corrections to Mail Classification Schedule Postal Regulatory Commission. Proposed rulemaking. AGENCY: ACTION: The Commission is proposing rules addressing changes and corrections to the Mail Classification Schedule (MCS). The proposed rules establish separate procedures for material changes in services offered in connection with products and corrections to product descriptions. The primary purposes of the proposed rules are to ensure that the MCS accurately describes the current product offerings of the Postal Service and to ensure compliance with the relevant statutory provisions when material changes to product offerings are made. The Commission invites public comment on the proposals. DATES: Comments are due: December 24, 2014. Reply comments are due: January 8, 2015. ADDRESSES: Submit comments electronically via the Commission’s Filing Online system at http:// www.prc.gov. Those who cannot submit comments electronically should contact the person identified in the FOR FURTHER INFORMATION CONTACT section by telephone for advice on filing alternatives. SUMMARY: asabaliauskas on DSK5VPTVN1PROD with PROPOSALS FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202–789–6820. SUPPLEMENTARY INFORMATION: Regulatory History 72 FR 63662, November 9, 2007. Table of Contents I. Introduction II. Background VerDate Sep<11>2014 16:57 Nov 21, 2014 Jkt 235001 III. Proposed Rules IV. Explanation of Proposed Rules V. Comments Requested VI. Ordering Paragraphs I. Introduction With this Notice of Proposed Rulemaking, the Commission requests comments and suggestions on proposed rules regarding requests to change or correct the Mail Classification Schedule (MCS). The primary purposes of this rulemaking are to ensure that the MCS accurately describes the current product offerings of the Postal Service and to ensure compliance with the relevant provisions of title 39 of the United States Code when material changes to product offerings are made. The proposed rules also are intended to provide the Commission with additional flexibility to ensure that the Postal Service is filing under the appropriate subpart of part 3020 of title 39 of the Code of Federal Regulations. After the passage of the Postal Accountability and Enhancement Act (PAEA) in 2006,1 the Commission issued regulations to implement PAEA’s modern system of rate regulation, including regulations on the procedures to follow in changing the product lists and MCS.2 In proposing the modern system of rate regulation, the Commission cautioned that the intent is that these regulations provide a reasonable starting point and that will they evolve over time.3 As the Postal Service and Commission have used the current regulatory scheme to make modifications to the product lists and changes to the MCS, a procedural gap has been identified. Remedying this procedural gap should make the process operate better. The current regulations have not satisfactorily addressed MCS changes that are more significant than minor corrections to the MCS but do not rise to the level of a product list modification. In these cases, the current regulations regarding the filing requirements sometimes do not provide the Commission with sufficient information to make the necessary determination as to whether an MCS change is appropriate. As a result, the Commission has undertaken additional questioning during the proceedings, leading to the expenditure of additional 1 Postal Accountability and Enhancement Act (PAEA), Pub. L. 10–435, 120 Stat. 3198 (2006). 2 Docket No. RM2007–1, Order Establishing Ratemaking Regulations for Market Dominant and Competitive Products, October 29, 2007 (Order No. 43). 3 Docket No. RM2007–1, Order Proposing Regulations to Establish a System of Ratemaking, August 15, 2007, at 2 (Order No. 26). PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 69781 resources by the Commission, the Postal Service, and other interested persons. The use of this additional inquiry process in such cases has also complicated the Commission’s review. These regulations are designed to clarify and streamline the process by specifying that the Postal Service provide all of the necessary information for the Commission to make its determination on such requests at the outset of the proceeding. II. Background The Commission is charged with maintaining accurate product lists. See 39 U.S.C. 3642. In Docket No. RM2007– 1, the Commission promulgated rules establishing the MCS as the vehicle for presenting the product lists with necessary descriptive content. Order No. 26 at 85. Those rules are codified at 39 CFR part 3020. Subpart A describes the contents of the MCS and provides for its publication in the Federal Register. Subparts B, C, and D specify the procedures whereby the Postal Service, mail users, and the Commission may seek to modify the product lists in the MCS. Subpart E specifies procedures that allow the Postal Service to update provisions of the MCS with minimal Commission review. Order No. 26 at 97. Subpart F establishes that size and weight limitations appear in the MCS and provides procedures for Postal Service updates to those limits. This proposed rulemaking concerns subpart E. In its order proposing the rules that are codified at part 3020, the Commission explained that subpart E requires the Postal Service to ensure that product descriptions in the MCS accurately reflect the current offerings of Postal Service products and services. Id. The Commission accordingly proposed procedures whereby the Postal Service could submit corrections to product descriptions so that the Commission could update the MCS. Id. The Commission recognized that there are inherent limits in the scope or magnitude of an update allowable under subpart E. It indicated that updates that would modify the market dominant or the competitive product lists are specifically excluded from subpart E.4 The Commission concluded that a proposed update may not change the nature of a service to such an extent that it effectively creates a new product or eliminates an existing product. Id. In comments on the proposed rules, McGraw-Hill and Valpak expressed 4 The Commission also observed there were implicit exclusions as well, such as updates that might be governed by other rules such as changes to rates and fees. Id. E:\FR\FM\24NOP1.SGM 24NOP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 69782 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules concern that proceedings under subpart E would not provide for Commission review or allow for public comment. McGraw-Hill posed a hypothetical example whereby the Postal Service could use the procedures in subpart E to make major changes to the Outside County Periodicals subclass, including eventual full zoning of the editorial pound charge for Outside County Periodicals mail, without substantive review by the Commission.5 Both commenters observed that parties adversely affected by proposed changes would not have an opportunity to raise the issue with the Commission until after the change was implemented. McGraw-Hill Comments at 3–4; Valpak Comments at 16. Valpak also expressed concern that classification changes of considerable importance could be made pursuant to subpart E and suggested that comments and Commission review of proposals should be permitted.6 Both commenters concluded that postimplementation review would be inadequate to remedy potential abuse of the subpart E procedures. McGraw-Hill Comments at 4; Valpak Comments at 15–16. On October 29, 2007, the Commission issued Order No. 43, adopting the current version of subpart E. Order No. 43 at 107. Acknowledging the commenters’ concerns, the Commission noted that there is a continuum of possible classification changes, ranging from those that only require the Postal Service to inform the Commission to those that trigger the requirements of 39 U.S.C. 3642. Id. The Commission confirmed that subpart E was not intended to provide an avenue for comprehensive pre-implementation review of classification changes. Id. at 108. Nonetheless, so as to provide an avenue for public input and to ensure that proposals are properly filed under the correct rules, the Commission added a new provision, § 3020.92. That section provides interested persons with an opportunity to comment on whether the planned changes are inconsistent with 39 U.S.C. 3642. Over the course of nearly seven years since the Commission adopted the rules, it has had numerous occasions to consider proposals to amend the MCS pursuant to subpart E. The Commission 5 Docket No. RM2007–1, Comments of the McGraw-Hill Companies, Inc. in Response to Order No. 26, Proposing Regulations to Establish a System of Ratemaking, September 24, 2007, at 2–3 (McGraw-Hill Comments). 6 Docket No. RM2007–1, Valpak Direct Marketing Systems, Inc. and Valpak Dealers’ Association, Inc. Comments on Regulations Establishing a System of Ratemaking in Response to Commission Order No. 26, September 24, 2007, at 14 (Valpak Comments). VerDate Sep<11>2014 16:57 Nov 21, 2014 Jkt 235001 has found the procedures provided in subpart E to be appropriate when the Postal Service proposes minor changes to the MCS. These include, for example, the Postal Service’s decision to rebrand Express Mail as Priority Mail Express, the decision to rebrand Delivery Confirmation as USPS Tracking, and the decision to add Timor-Leste to the country price lists for International Mail.7 In each of these instances, the Commission confirmed that the proposed change was minor in nature. The streamlined procedures in subpart E enabled the Postal Service to update the MCS in an expeditious manner, subject to limited review. However, a recurring challenge to requests made pursuant to subpart E has emerged. That challenge concerns the distinction between minor corrections and changes of a more substantial nature. Because subpart E is limited to minor corrections while subparts B, C, and D are limited to proposals to create a new product, or transfer or eliminate an existing product, a gap exists when the Postal Service proposes to change an existing product to a degree greater than what could be considered a minor correction. An examination of cases involving such gaps is instructive. In several instances, the Commission has explicitly recognized the gap in its rules. In Docket No. MC2012–26, the Commission considered the Postal Service’s proposal to offer enhanced services at competitive post office box service locations.8 The enhanced services consisted of email notification, street addressing, and private carrier package delivery. The Postal Service, which began offering the services in early 2012, did so without instituting proceedings to change the MCS. In March 2012, competitors filed a complaint challenging the Postal Service’s offering of the enhanced services. The Commission held the complaint in abeyance and invited the Postal Service to make a filing pursuant to part 3020 subpart B. In its filing, the Postal Service argued that since the service enhancements were never intended to create a new product, the procedures provided under subpart B 7 Docket No. MC2013–45, Order Approving Minor Classification Change, May 13, 2013 (Order No. 1713); Docket No. MC2013–28, Order Approving Minor Classification Changes Related to Certain Ancillary Services, January 24, 2013 (Order No. 1631); MC2012–17, Order Approving Minor Classification Change Concerning Timor-Leste, May 23, 2012 (Order No. 1351). 8 See Docket No. MC2012–26, Order on Elective Filing Regarding Post Office Box Service Enhancements, February 14, 2013 (Order No. 1657). PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 were superfluous.9 The Commission agreed that the enhanced services did not change the competitive post office box service as to constitute a new product, and therefore did not trigger the filing requirement under subpart B. Order No. 1657 at 20. The Commission noted that the changes were ill-suited to subpart E as well. Because the enhanced competitive post office boxes did not constitute a new product and because the changes were not minor technical corrections to an existing product, the Commission observed that such changes did not fit squarely within either set of rules. Id. at 23. In Docket No. MC2011–28, the Postal Service filed notice pursuant to subpart E proposing to narrow the letter prohibition for Commercial First-Class Package Service to cover only the Commercial Base portion of the product.10 The Public Representative argued that the proposed change was substantive in nature and therefore should have been brought pursuant to subpart B.11 He stated that there is a void in the Commission’s rules for addressing changes that fall between a scrivener’s error and a required change to a product list. PR Comments at 2. The Public Representative asked the Commission to promulgate rules to address this procedural gap. Id. at 2, n.2. The Postal Service argued that subpart E was appropriate for the proposed changes, but acknowledged that there is some ambiguity in the rules.12 The Commission found that the Postal Service’s initial subpart E filing did not provide sufficient information for it to effectively review the proposed changes. Order No. 835 at 7. It noted that obtaining sufficient information is particularly important in cases brought pursuant to subpart E because of the short time period for interested persons to comment and the Commission to act. Id. at 7–8. Although subsequent information cured the information defect in that case, the Commission indicated that it would consider adding new regulations for classification 9 Docket No. MC2012–26, Response of the United States Postal Service to Order No. 1366, July 9, 2012, at 4 (Postal Service Response). 10 Docket No. MC2011–28, Order Regarding Commercial First-Class Package Service, August 31, 2011 (Order No. 835). The Postal Service also proposed to change the name of the product from Lightweight Commercial Parcels to Commercial First-Class Package Service. Id. at 2. 11 Docket No. MC2011–28, Public Representative Comments Concerning Lightweight Commercial Parcels Classification Change, August 22, 2011, at 2–3 (PR Comments). 12 Docket No. MC2011–28, Response of the United States Postal Service to Public Representative Comments, August 24, 2011, at 2 (Postal Service Response to PR Comments). E:\FR\FM\24NOP1.SGM 24NOP1 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules asabaliauskas on DSK5VPTVN1PROD with PROPOSALS changes that rise above the level of corrections to the MCS. Id. at 8. In Docket No. MC2011–5, the Postal Service filed notice pursuant to subpart E of proposed amendments to the MCS language for the Outside County Periodicals to modify the method of calculating bundle and pallet charges for flats that are co-mailed or copalletized with Standard Mail flats.13 Though it approved the request, the Commission observed that no other category in the Commission’s rules suited the nature of the request, which involved preparation changes and limited adjustments to postage assessment. Order No. 667 at 5. In Docket No. MC2012–8, the Postal Service filed notice under subpart E of amendments to the MCS raising the minimum dollar amount required to qualify for a Global Expedited Package Services (GEPS) contract.14 The Public Representative contended that the proposed change was not minor in terms of its effect on small and medium size businesses. Order No. 1225 at 2. The Commission approved the request, noting that the Public Representative did not allege that the change added, removed, or transferred a product, which would trigger the filing requirements under subpart B. The foregoing examples illustrate the need for regulations that close the gap between modifications brought pursuant to subparts B through D and corrections to the product descriptions brought pursuant to subpart E. The rules proposed herein are designed to close that gap. III. Proposed Rules The rules proposed in this notice of proposed rulemaking replace current subpart E with a new subpart E. The new subpart E establishes separate procedures for: (1) Changes to services offered in connection with products, and (2) corrections to product descriptions. Under current subpart E, every proposed alteration to the MCS is made using one of two categorical means. Alterations may be proposed either as modifications to the product lists or as corrections to the product descriptions in the MCS. The rules proposed herein create an additional third categorical means of altering the MCS—changes to the product descriptions. It is the Commission’s expectation that these three categories—modifications, 13 See Docket No. MC2011–5, Order Approving Mail Classification Changes, February 8, 2011 (Order No. 667). 14 Docket No. MC2012–8, Order Approving Mail Classification Change, February 10, 2012 (Order No. 1225). VerDate Sep<11>2014 16:57 Nov 21, 2014 Jkt 235001 material changes, and minor corrections—will provide a comprehensive regime governing all alterations to the MCS. Subparts B, C, and D will continue to provide procedures for modifications to the product lists in the MCS. The rules define modification as adding a product to a list, removing a product from a list, or moving a product from one list to the other list.15 Proposed subpart E will provide new rules governing changes to product descriptions and modify existing rules governing corrections to product descriptions. It is the Commission’s expectation that when the Postal Service proposes to modify the MCS it will file its proposal in one of three ways, either as a modification to the product lists under subpart B, a change to a product description under subpart E, or a correction to a product description also under subpart E. In each instance, the Postal Service will need to determine into which category its proposal falls. The current rules define a modification as the addition of a product to a product list, the removal of a product from a product list, or the moving of a product from one list to the other. Thus, the rules presuppose that modifications operate at the product level and will not just involve changes to product descriptions. By contrast, a change or correction to a product description will operate at the sub-product level. Under the proposed rules, the Commission expects that the Postal Service will employ either the rules for changes to product descriptions or the rules for corrections to product descriptions whenever it seeks to alter the MCS language for existing products. A. Changes to Product Descriptions The proposed rules distinguish between material changes and minor corrections to product descriptions. The proposed rules that apply to changes are codified at §§ 3020.80 through 3020.83, and apply to changes that are material (i.e., not minor) in nature. The Commission expects that the Postal Service will make a threshold determination in each case as to whether the proposed alteration is material or minor in nature when it seeks to alter a product description. In determining whether a proposed alteration is a material change that is subject to the § 3020.80 rules, the most important consideration is the degree to which the proposed alteration affects the characteristics of the product. The perspectives of the Postal Service, mail 15 See 39 CFR 3020.30, 39 CFR 3020.50, and 39 CFR 3020.70. PO 00000 Frm 00007 Fmt 4702 Sfmt 4702 69783 users, competitors, and stakeholders will be relevant to this determination. The post office box enhanced services at issue in Docket No. MC2012–26 provide an example of the type of alterations to a product that would require a filing under the proposed rules governing material changes to a product description. In that docket, the Commission considered the addition of email notification, street addressing, and private carrier package delivery to the existing competitive Post Office Box Service product. The MCS product description indicated that Post Office Box Service provides the customer with a locked receptacle for the receipt of mail during specified hours of access to the receptacle.16 Under the proposed rules, the enhanced services would merit a filing to amend the MCS under § 3020.80. Relevant factors to support this conclusion are that the enhanced services significantly changed the post office box user experience—in particular by permitting customers to receive packages delivered by private carriers—and that the enhanced services could significantly impact private mail box competitors, who prior to the enhancements distinguished their services from post office box service on the basis of the similar enhancements that they offered and that the Postal Service did not. Numerous competitors submitted comments suggesting that the Postal Service would have an unfair competitive advantage if it were permitted to offer the enhanced services. Order No. 1657 at 3, 11–13.17 Because the changes to the MCS product description that the enhanced services brought about were more than minor corrections, such changes would require a filing under the proposed rules pertaining to material changes. The proposed rules governing changes to MCS product descriptions require the Postal Service to make a showing that is less onerous than the showing that is required for modifications to the product lists but more robust than the showing that it is required for corrections to MCS product descriptions. A recurring challenge in minor correction cases has been the Commission’s need to obtain sufficient information to evaluate the proposal and determine whether it comports with title 39 and Commission regulations. Under the current rules that apply to 16 Mail Classification Schedule 1550.1(a). is not to suggest that the number of comments that a proposal receives establishes whether the proposal is a material change or a minor correction. However, the existence and content of comments from interested persons will provide some evidence of the materiality of a proposal. 17 This E:\FR\FM\24NOP1.SGM 24NOP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS 69784 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules corrections, the Commission is required to find that the proposed corrections are not inconsistent with 39 U.S.C. 3642. 39 CFR 3020.93. Commenters have sometimes stated that the Postal Service’s notice does not provide sufficient supporting justification. See, e.g., PR Comments at 3. The proposed rules for material changes address this concern by requiring the Postal Service to provide supporting justification that describes the change and the rationale for it, explains why the change will not result in a violation of statutory and regulatory standards, and describes the impact that the change will have on mail users and competitors, if applicable. Under the proposed rules, the Postal Service will be required to file requests to change the MCS no later than 30 days prior to the implementation date of the proposed change. This is a longer period than the current rules governing corrections, which require that the Postal Service provide notice of the correction 15 days prior to the effective date. See 39 CFR 3020.91. As commenters have noted, when the Postal Service proposes changes to the MCS that are more than minor corrections, the 15-day notice period runs the risk of permitting the change to occur before the Commission has completed its review. See, e.g., PR Comments at 3. The problem has arisen, in part, because the Commission has needed to issue information requests to obtain sufficient information so that it could make a threshold determination as to whether a proposal was properly filed as a minor correction to the product description. The Commission anticipates that in most instances a 30day review period for changes will give it and members of the public sufficient time to issue any necessary information requests, offer comments, and review the request. It also expects that the proposed rules, by filling the existing gap between the rules for modifications to the product lists and the rules for corrections to the MCS product descriptions, will reduce the need for the Commission to issue information requests on the threshold question of whether the request was filed under the proper rules and will streamline and reduce the time that it takes for the Commission to process requests.18 18 In cases in which commenters have expressed concerns that a proposed change is more than a minor correction, the amount of time that it has taken for the Commission to complete its review has varied. See Docket No. MC2011–5 (95 days); Docket No. MC2011–28 (19 days); Docket No. MC2012–8 (11 days); and Docket No. MC2012–26 (189 days). VerDate Sep<11>2014 16:57 Nov 21, 2014 Jkt 235001 The proposed rules provide the Commission with a menu of options for acting on a request. While the current rules that apply to corrections do not delineate what action the Commission may take if a proposal is determined to be inconsistent with section 3642, the proposed rules indicate that the Commission may approve the proposed changes, reject the proposed changes, provide the Postal Service with an opportunity to amend the proposed changes, direct the Postal Service to file under a different subpart, institute further proceedings, or take other appropriate action. This proposed rule is based on a similar provision in the Commission’s current rules governing modifications to the product lists, which provide more guidance in terms of actions that the Commission may take.19 In addition, a new provision that is not currently part of the Commission’s rules governing modifications to the product lists, but which is included here, permits the Commission to redirect requests when it believes the request should be filed under a different subpart of part 3020. The Commission expects this will reduce the need for it to rely on information requests to make a threshold determination as to whether a request was filed under the appropriate rules. B. Corrections to Product Descriptions The proposed rules modify the existing rules governing corrections to MCS product descriptions, which are codified at §§ 3020.90 through 3020.92. The proposed rules codify Commission precedent holding that the rules applicable to corrections apply only to corrections to the product description that are minor in nature. The proposed rules will require the Postal Service, when it files notice of a correction to a product description, to explain why the correction does not constitute a material change to the product description. This will provide the Postal Service with an opportunity to explain at the outset why its proposal is a minor correction rather than a material change to a product description. The proposed rules also require the Postal Service, when it files notice of a correction to a product description, to explain why the correction is consistent with any applicable provisions of title 39. Under the current rules, the Commission is required to make a determination that the correction is not inconsistent with section 3642. 39 CFR 19 See 39 CFR 3020.30.34, 39 CFR 3020.55, and 39 CFR 3020.75. PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 3020.93. However, the current rules do not require the Postal Service to provide any justification or explanation to support such a Commission finding. Without such information, the Commission has found it necessary in past proceedings to request clarifying information from the Postal Service to fulfill its regulatory responsibilities. The proposed rules’ revised approach will provide the Postal Service with an opportunity to explain at the outset why its proposal is consistent with applicable statutory provisions instead of relying on an inquiry process which can complicate the Commission’s review. This approach would also harmonize the Commission’s rules for reviews of corrections to product descriptions with those governing modifications to the product lists. Such rules require the party making the request to show that the proposed modification is consistent with the relevant statutory provisions and Commission regulations. See 39 CFR 3020.32, 3020.52, and 3020.72. This is also the better approach for reviews of corrections to product descriptions, as the Postal Service will, in most cases, have the best information as to the impact that the correction will have. The proposed rules require the Postal Service to address any possible legal issues when it files its notice. The Commission expects that this will give commenters and the Commission notice of possible legal issues so that they may be addressed within the 15-day window. The proposed rules provide the Commission with several options for acting on the notice. They provide that the Commission may approve the proposed corrections, reject the proposed corrections, provide the Postal Service with an opportunity to amend the proposed corrections, direct the Postal Service to file under a different subpart, institute further proceedings, or take other appropriate action. The Commission expects that the rule permitting it to direct the Postal Service to file under a different subpart of part 3020 will reduce the need to rely on information requests to make a threshold determination as to whether a request was filed under the appropriate rules. IV. Explanation of Proposed Rules The following is a section-by-section analysis of the proposed rules: Proposed § 3020.80 establishes the basic criteria for proposals to change product descriptions under subpart E. It indicates that the rules apply to material changes, as opposed to minor corrections, to MCS product E:\FR\FM\24NOP1.SGM 24NOP1 asabaliauskas on DSK5VPTVN1PROD with PROPOSALS Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules descriptions. In determining whether a proposed alteration is a material change, the most important consideration is the degree to which the proposed alteration affects the characteristics of the product. The perspectives of the Postal Service, mail users, competitors, and stakeholders will be relevant to this determination. Paragraph (a) requires that the Postal Service submit a request to change the product description no later than 30 days prior to implementing the proposed change. Paragraph (b) indicates that requests shall include a copy of the proposed change and supporting justification. Proposed § 3020.81 delineates the supporting justification that the Postal Service is to provide. For all products, this includes a description of the changes, the rationale for them, and a description of the impact that the changes will have on users of the product and competitors. For market dominant products, the Postal Service is also required to explain why the changes are not inconsistent with 39 U.S.C. 3622(d) and 39 CFR part 3010. For competitive products, the Postal Service is also required to show that the changes will not result in a violation of 39 U.S.C. 3633 and 39 CFR part 3015. Proposed § 3020.82 requires that the Commission establish a docket, publish notice of the request on its Web site, designate a public representative, and provide interested persons with an opportunity to comment on the proposed changes. Proposed § 3020.83 requires that the Commission, upon review of the request and any comments: Approve the proposed changes; reject the proposed changes; provide the Postal Service with an opportunity to amend the proposed changes; direct the Postal Service to file under a different subpart; institute further proceedings; or direct other action that the Commission considers appropriate. Proposed § 3020.90 establishes the basic criteria for proposals to correct product descriptions under subpart E. It indicates that the rules apply only to minor corrections of product descriptions in the MCS. Paragraph (b) requires the Postal Service to file notice of corrections to product descriptions no later than 15 days prior to the effective date of the corrections. Paragraph (c) requires that the notice explain why the corrections do not constitute material changes for purposes of § 3020.80, explain why the corrections are consistent with any applicable provision of title 39, and requires the Postal Service to include a copy of the proposed corrections. VerDate Sep<11>2014 16:57 Nov 21, 2014 Jkt 235001 Proposed § 3020.91 requires that the Commission establish a docket, publish notice of the proposal on its Web site, designate a public representative, and provide interested persons with an opportunity to comment on the proposal. Proposed § 3020.92 requires that the Commission, upon review of the notice and any comments: Approve the proposed corrections; reject the proposed corrections; provide the Postal Service with an opportunity to amend the proposed corrections; direct the Postal Service to file under a different subpart; institute further proceedings; or take other action that the Commission considers appropriate. V. Comments Requested VI. Ordering Paragraphs It is ordered: 1. Docket No. RM2015–6 is established for the purpose of receiving comments with respect to the proposed rules attached to this Order. 2. The Commission proposes to amend its regulations at part 3020 subpart E as shown below the signature of the Secretary. 3. Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is designated as an officer of the Commission to represent the interests of the general public in this docket. 4. Interested persons may submit comments no later than 30 days after the date of publication of this notice in the Federal Register. 5. Reply comments may be filed no later than 45 days after the date of publication of this notice in the Federal Register. Frm 00009 Fmt 4702 Sfmt 4702 6. The Secretary shall arrange for publication of this order in the Federal Register in conformance with official publication requirements. List of Subjects in 39 CFR Part 3020 Administrative practice and procedure, Postal Service. For the reasons discussed in the preamble, the Commission proposes to amend chapter III of title 39 of the Code of Federal Regulations as follows: PART 3020—PRODUCT LISTS 1. The authority citation of part 3020 continues to read as follows: ■ Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682. 2. Revise subpart E of part 3020 to read as follows: ■ Interested persons are invited to provide written comments concerning the proposed rules. Comments may include specific language amending the proposed rules. Comments are due no later than 30 days after the date of publication of this notice in the Federal Register. All comments and suggestions received will be available for review on the Commission’s Web site, http:// www.prc.gov. Interested persons are further invited to review the submissions and provide follow-up comments and suggestions within 15 additional days (that is, within 45 days of the publication of this notice in the Federal Register). Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is appointed to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in the above-captioned docket. PO 00000 69785 Subpart E—Requests Initiated by the Postal Service to Make Material Changes or Minor Corrections to the Mail Classification Schedule Sec. 3020.80 Material changes to product descriptions. 3020.81 Supporting justification for changes to product descriptions. 3020.82 Docket and notice. 3020.83 Commission review. 3020.84–3020.89 [Reserved] 3020.90 Minor corrections to product descriptions. 3020.91 Docket and notice. 3020.92 Commission Review. Subpart E—Requests Initiated by the Postal Service To Make Material Changes or Minor Corrections to the Mail Classification Schedule § 3020.80 Material changes to product descriptions. (a) Whenever the Postal Service proposes material changes to a product description in the Mail Classification Schedule, no later than 30 days prior to implementing the proposed changes, it shall submit to the Commission a request to change the product description in the Mail Classification Schedule. (b) The request shall: (1) Include a copy of the applicable sections of the Mail Classification Schedule and the proposed changes therein in legislative format; and (2) Provide all supporting justification for the changes upon which the Postal Service proposes to rely. § 3020.81 Supporting justification for changes to product descriptions. (a) Supporting justification for changes to a product description in the Mail Classification Schedule shall include a description of, and rationale for, the proposed changes to the product E:\FR\FM\24NOP1.SGM 24NOP1 69786 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Proposed Rules description; and the additional material in paragraphs (b) and (c) of this section. (b)(1) As to market dominant products, explain why the changes are not inconsistent with each requirement of 39 U.S.C. 3622(d) and part 3010 of this chapter; or (2) As to competitive products, explain why the changes will not result in the violation of any of the standards of 39 U.S.C. 3633 and part 3015 of this chapter. (c) Describe the impact that the changes will have on users of the product and on competitors. § 3020.82 Docket and notice. (a) The Commission shall take the actions identified in paragraphs (b) through (e) of this section. (b) Establish a docket for each request to change a product description in the Mail Classification Schedule; (c) Publish notice of the request on its Web site; (d) Designate an officer of the Commission to represent the interests of the general public in the docket; and (e) Provide interested persons with an opportunity to comment on whether the proposed changes are consistent with title 39 and applicable Commission regulations. § 3020.83 Commission review. (a) The Commission shall review the request and any comments filed. The Commission shall take one of the actions identified in paragraphs (b) through (g) of this section. (b) Approve the proposed changes, subject to editorial corrections; (c) Reject the proposed changes; (d) Provide the Postal Service with an opportunity to amend the proposed changes; (e) Direct the Postal Service to make an appropriate filing under a different subpart; (f) Institute further proceedings; or (g) Direct other action that the Commission considers appropriate. §§ 3020.84–3020.89 [Reserved] asabaliauskas on DSK5VPTVN1PROD with PROPOSALS § 3020.90 Minor corrections to product descriptions. (a) The Postal Service shall ensure that product descriptions in the Mail Classification Schedule accurately represent the current offerings of the Postal Service. (b) The Postal Service shall submit minor corrections to product descriptions in the Mail Classification Schedule by filing notice with the Commission no later than 15 days prior to the effective date of the proposed corrections. (c) The notice shall: VerDate Sep<11>2014 16:57 Nov 21, 2014 Jkt 235001 (1) Explain why the proposed corrections do not constitute material changes to the product description for purposes of § 3020.80; (2) Explain why the proposed corrections are consistent with any applicable provisions of title 39; and (3) Include a copy of the applicable sections of the Mail Classification Schedule and the proposed corrections therein in legislative format. § 3020.91 Docket and notice. (a) The Commission shall take the actions identified in paragraphs (b) through (e) of this section. (b) Establish a docket for each proposal to correct a product description in the Mail Classification Schedule; (c) Publish notice of the proposal on its Web site; (d) Designate an officer of the Commission to represent the interests of the general public in the docket; and (e) Provide interested persons with an opportunity to comment on whether the proposed corrections are consistent with title 39 and applicable Commission regulations. § 3020.92 Commission Review. (a) The Commission shall review the notice and any comments filed. The Commission shall take one of the actions identified in paragraphs (b) through (g) of this section. (b) Approve the proposed corrections, subject to editorial corrections; (c) Reject the proposed corrections; (d) Provide the Postal Service with an opportunity to amend the proposed corrections; (e) Direct the Postal Service to make an appropriate filing under a different subpart; (f) Institute further proceedings; or (g) Direct other action that the Commission considers appropriate. By the Commission. Ruth Ann Abrams, Acting Secretary. [FR Doc. 2014–27589 Filed 11–21–14; 8:45 am] BILLING CODE 7710–FW–P PO 00000 ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA–R10–OAR–2010–1071; FRL–9919–37– Region 10] Approval and Promulgation of Implementation Plans; State of Washington; Regional Haze State Implementation Plan; Federal Implementation Plan for Best Available Retrofit Technology for Alcoa Intalco Operations, Tesoro Refining and Marketing, and Alcoa Wenatchee Environmental Protection Agency (EPA). ACTION: Proposed rule. AGENCY: On June 11, 2014, the Environmental Protection Agency (EPA) published a final rule in the Federal Register concerning, in part, promulgation of a Federal Implementation Plan (FIP) provision for regional haze in the State of Washington. This action identifies and corrects an error in that action by adding the factor to convert from tons of sulfur dioxide (SO2) to pounds of SO2 that was inadvertently left out of the amendatory instructions for the FIP for the Alcoa Wenatchee Works. DATES: Comments must be received on or before December 24, 2014. ADDRESSES: Submit your comments, identified by Docket ID No. EPA–R10– OAR–2010–1071, by any of the following methods: • www.regulations.gov: Follow the on-line instructions for submitting comments. • Email: body.steve@epa.gov • Mail: Steve Body, U.S. EPA Region 10, Office of Air, Waste and Toxics, AWT–150, 1200 Sixth Avenue, Suite 900, Seattle, WA 98101 • Hand Delivery/Courier: U.S. EPA Region 10, 1200 Sixth Avenue, Suite 900, Seattle, WA 98101. Attention: Steve Body, Office of Air, Waste and Toxics, AWT–150. Such deliveries are only accepted during normal hours of operation, and special arrangements should be made for deliveries of boxed information. Please see the direct final rule which is located in the Rules section of this Federal Register for detailed instructions on how to submit comments. SUMMARY: FOR FURTHER INFORMATION CONTACT: Steve Body at telephone number: (206) 553–0782, email address: body.steve@epa.gov, or the above EPA, Region 10 address. Frm 00010 Fmt 4702 Sfmt 4702 E:\FR\FM\24NOP1.SGM 24NOP1

Agencies

[Federal Register Volume 79, Number 226 (Monday, November 24, 2014)]
[Proposed Rules]
[Pages 69781-69786]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27589]


=======================================================================
-----------------------------------------------------------------------

POSTAL REGULATORY COMMISSION

39 CFR Part 3020

[Docket No. RM2015-6; Order No. 2250]


Changes or Corrections to Mail Classification Schedule

AGENCY: Postal Regulatory Commission.

ACTION: Proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Commission is proposing rules addressing changes and 
corrections to the Mail Classification Schedule (MCS). The proposed 
rules establish separate procedures for material changes in services 
offered in connection with products and corrections to product 
descriptions. The primary purposes of the proposed rules are to ensure 
that the MCS accurately describes the current product offerings of the 
Postal Service and to ensure compliance with the relevant statutory 
provisions when material changes to product offerings are made. The 
Commission invites public comment on the proposals.

DATES: Comments are due: December 24, 2014. Reply comments are due: 
January 8, 2015.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov. Those who cannot submit comments 
electronically should contact the person identified in the FOR FURTHER 
INFORMATION CONTACT section by telephone for advice on filing 
alternatives.

FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 
202-789-6820.

SUPPLEMENTARY INFORMATION: 

Regulatory History

    72 FR 63662, November 9, 2007.

Table of Contents

I. Introduction
II. Background
III. Proposed Rules
IV. Explanation of Proposed Rules
V. Comments Requested
VI. Ordering Paragraphs

I. Introduction

    With this Notice of Proposed Rulemaking, the Commission requests 
comments and suggestions on proposed rules regarding requests to change 
or correct the Mail Classification Schedule (MCS).
    The primary purposes of this rulemaking are to ensure that the MCS 
accurately describes the current product offerings of the Postal 
Service and to ensure compliance with the relevant provisions of title 
39 of the United States Code when material changes to product offerings 
are made. The proposed rules also are intended to provide the 
Commission with additional flexibility to ensure that the Postal 
Service is filing under the appropriate subpart of part 3020 of title 
39 of the Code of Federal Regulations.
    After the passage of the Postal Accountability and Enhancement Act 
(PAEA) in 2006,\1\ the Commission issued regulations to implement 
PAEA's modern system of rate regulation, including regulations on the 
procedures to follow in changing the product lists and MCS.\2\ In 
proposing the modern system of rate regulation, the Commission 
cautioned that the intent is that these regulations provide a 
reasonable starting point and that will they evolve over time.\3\
---------------------------------------------------------------------------

    \1\ Postal Accountability and Enhancement Act (PAEA), Pub. L. 
10-435, 120 Stat. 3198 (2006).
    \2\ Docket No. RM2007-1, Order Establishing Ratemaking 
Regulations for Market Dominant and Competitive Products, October 
29, 2007 (Order No. 43).
    \3\ Docket No. RM2007-1, Order Proposing Regulations to 
Establish a System of Ratemaking, August 15, 2007, at 2 (Order No. 
26).
---------------------------------------------------------------------------

    As the Postal Service and Commission have used the current 
regulatory scheme to make modifications to the product lists and 
changes to the MCS, a procedural gap has been identified. Remedying 
this procedural gap should make the process operate better.
    The current regulations have not satisfactorily addressed MCS 
changes that are more significant than minor corrections to the MCS but 
do not rise to the level of a product list modification. In these 
cases, the current regulations regarding the filing requirements 
sometimes do not provide the Commission with sufficient information to 
make the necessary determination as to whether an MCS change is 
appropriate. As a result, the Commission has undertaken additional 
questioning during the proceedings, leading to the expenditure of 
additional resources by the Commission, the Postal Service, and other 
interested persons. The use of this additional inquiry process in such 
cases has also complicated the Commission's review.
    These regulations are designed to clarify and streamline the 
process by specifying that the Postal Service provide all of the 
necessary information for the Commission to make its determination on 
such requests at the outset of the proceeding.

II. Background

    The Commission is charged with maintaining accurate product lists. 
See 39 U.S.C. 3642. In Docket No. RM2007-1, the Commission promulgated 
rules establishing the MCS as the vehicle for presenting the product 
lists with necessary descriptive content. Order No. 26 at 85. Those 
rules are codified at 39 CFR part 3020. Subpart A describes the 
contents of the MCS and provides for its publication in the Federal 
Register. Subparts B, C, and D specify the procedures whereby the 
Postal Service, mail users, and the Commission may seek to modify the 
product lists in the MCS. Subpart E specifies procedures that allow the 
Postal Service to update provisions of the MCS with minimal Commission 
review. Order No. 26 at 97. Subpart F establishes that size and weight 
limitations appear in the MCS and provides procedures for Postal 
Service updates to those limits.
    This proposed rulemaking concerns subpart E. In its order proposing 
the rules that are codified at part 3020, the Commission explained that 
subpart E requires the Postal Service to ensure that product 
descriptions in the MCS accurately reflect the current offerings of 
Postal Service products and services. Id. The Commission accordingly 
proposed procedures whereby the Postal Service could submit corrections 
to product descriptions so that the Commission could update the MCS. 
Id. The Commission recognized that there are inherent limits in the 
scope or magnitude of an update allowable under subpart E. It indicated 
that updates that would modify the market dominant or the competitive 
product lists are specifically excluded from subpart E.\4\ The 
Commission concluded that a proposed update may not change the nature 
of a service to such an extent that it effectively creates a new 
product or eliminates an existing product. Id.
---------------------------------------------------------------------------

    \4\ The Commission also observed there were implicit exclusions 
as well, such as updates that might be governed by other rules such 
as changes to rates and fees. Id.
---------------------------------------------------------------------------

    In comments on the proposed rules, McGraw-Hill and Valpak expressed

[[Page 69782]]

concern that proceedings under subpart E would not provide for 
Commission review or allow for public comment. McGraw-Hill posed a 
hypothetical example whereby the Postal Service could use the 
procedures in subpart E to make major changes to the Outside County 
Periodicals subclass, including eventual full zoning of the editorial 
pound charge for Outside County Periodicals mail, without substantive 
review by the Commission.\5\ Both commenters observed that parties 
adversely affected by proposed changes would not have an opportunity to 
raise the issue with the Commission until after the change was 
implemented. McGraw-Hill Comments at 3-4; Valpak Comments at 16. Valpak 
also expressed concern that classification changes of considerable 
importance could be made pursuant to subpart E and suggested that 
comments and Commission review of proposals should be permitted.\6\ 
Both commenters concluded that post-implementation review would be 
inadequate to remedy potential abuse of the subpart E procedures. 
McGraw-Hill Comments at 4; Valpak Comments at 15-16.
---------------------------------------------------------------------------

    \5\ Docket No. RM2007-1, Comments of the McGraw-Hill Companies, 
Inc. in Response to Order No. 26, Proposing Regulations to Establish 
a System of Ratemaking, September 24, 2007, at 2-3 (McGraw-Hill 
Comments).
    \6\ Docket No. RM2007-1, Valpak Direct Marketing Systems, Inc. 
and Valpak Dealers' Association, Inc. Comments on Regulations 
Establishing a System of Ratemaking in Response to Commission Order 
No. 26, September 24, 2007, at 14 (Valpak Comments).
---------------------------------------------------------------------------

    On October 29, 2007, the Commission issued Order No. 43, adopting 
the current version of subpart E. Order No. 43 at 107. Acknowledging 
the commenters' concerns, the Commission noted that there is a 
continuum of possible classification changes, ranging from those that 
only require the Postal Service to inform the Commission to those that 
trigger the requirements of 39 U.S.C. 3642. Id. The Commission 
confirmed that subpart E was not intended to provide an avenue for 
comprehensive pre-implementation review of classification changes. Id. 
at 108. Nonetheless, so as to provide an avenue for public input and to 
ensure that proposals are properly filed under the correct rules, the 
Commission added a new provision, Sec.  3020.92. That section provides 
interested persons with an opportunity to comment on whether the 
planned changes are inconsistent with 39 U.S.C. 3642.
    Over the course of nearly seven years since the Commission adopted 
the rules, it has had numerous occasions to consider proposals to amend 
the MCS pursuant to subpart E. The Commission has found the procedures 
provided in subpart E to be appropriate when the Postal Service 
proposes minor changes to the MCS. These include, for example, the 
Postal Service's decision to rebrand Express Mail as Priority Mail 
Express, the decision to rebrand Delivery Confirmation as USPS 
Tracking, and the decision to add Timor-Leste to the country price 
lists for International Mail.\7\ In each of these instances, the 
Commission confirmed that the proposed change was minor in nature. The 
streamlined procedures in subpart E enabled the Postal Service to 
update the MCS in an expeditious manner, subject to limited review.
---------------------------------------------------------------------------

    \7\ Docket No. MC2013-45, Order Approving Minor Classification 
Change, May 13, 2013 (Order No. 1713); Docket No. MC2013-28, Order 
Approving Minor Classification Changes Related to Certain Ancillary 
Services, January 24, 2013 (Order No. 1631); MC2012-17, Order 
Approving Minor Classification Change Concerning Timor-Leste, May 
23, 2012 (Order No. 1351).
---------------------------------------------------------------------------

    However, a recurring challenge to requests made pursuant to subpart 
E has emerged. That challenge concerns the distinction between minor 
corrections and changes of a more substantial nature. Because subpart E 
is limited to minor corrections while subparts B, C, and D are limited 
to proposals to create a new product, or transfer or eliminate an 
existing product, a gap exists when the Postal Service proposes to 
change an existing product to a degree greater than what could be 
considered a minor correction. An examination of cases involving such 
gaps is instructive.
    In several instances, the Commission has explicitly recognized the 
gap in its rules. In Docket No. MC2012-26, the Commission considered 
the Postal Service's proposal to offer enhanced services at competitive 
post office box service locations.\8\ The enhanced services consisted 
of email notification, street addressing, and private carrier package 
delivery. The Postal Service, which began offering the services in 
early 2012, did so without instituting proceedings to change the MCS. 
In March 2012, competitors filed a complaint challenging the Postal 
Service's offering of the enhanced services. The Commission held the 
complaint in abeyance and invited the Postal Service to make a filing 
pursuant to part 3020 subpart B. In its filing, the Postal Service 
argued that since the service enhancements were never intended to 
create a new product, the procedures provided under subpart B were 
superfluous.\9\ The Commission agreed that the enhanced services did 
not change the competitive post office box service as to constitute a 
new product, and therefore did not trigger the filing requirement under 
subpart B. Order No. 1657 at 20. The Commission noted that the changes 
were ill-suited to subpart E as well. Because the enhanced competitive 
post office boxes did not constitute a new product and because the 
changes were not minor technical corrections to an existing product, 
the Commission observed that such changes did not fit squarely within 
either set of rules. Id. at 23.
---------------------------------------------------------------------------

    \8\ See Docket No. MC2012-26, Order on Elective Filing Regarding 
Post Office Box Service Enhancements, February 14, 2013 (Order No. 
1657).
    \9\ Docket No. MC2012-26, Response of the United States Postal 
Service to Order No. 1366, July 9, 2012, at 4 (Postal Service 
Response).
---------------------------------------------------------------------------

    In Docket No. MC2011-28, the Postal Service filed notice pursuant 
to subpart E proposing to narrow the letter prohibition for Commercial 
First-Class Package Service to cover only the Commercial Base portion 
of the product.\10\ The Public Representative argued that the proposed 
change was substantive in nature and therefore should have been brought 
pursuant to subpart B.\11\ He stated that there is a void in the 
Commission's rules for addressing changes that fall between a 
scrivener's error and a required change to a product list. PR Comments 
at 2. The Public Representative asked the Commission to promulgate 
rules to address this procedural gap. Id. at 2, n.2. The Postal Service 
argued that subpart E was appropriate for the proposed changes, but 
acknowledged that there is some ambiguity in the rules.\12\ The 
Commission found that the Postal Service's initial subpart E filing did 
not provide sufficient information for it to effectively review the 
proposed changes. Order No. 835 at 7. It noted that obtaining 
sufficient information is particularly important in cases brought 
pursuant to subpart E because of the short time period for interested 
persons to comment and the Commission to act. Id. at 7-8. Although 
subsequent information cured the information defect in that case, the 
Commission indicated that it would consider adding new regulations for 
classification

[[Page 69783]]

changes that rise above the level of corrections to the MCS. Id. at 8.
---------------------------------------------------------------------------

    \10\ Docket No. MC2011-28, Order Regarding Commercial First-
Class Package Service, August 31, 2011 (Order No. 835). The Postal 
Service also proposed to change the name of the product from 
Lightweight Commercial Parcels to Commercial First-Class Package 
Service. Id. at 2.
    \11\ Docket No. MC2011-28, Public Representative Comments 
Concerning Lightweight Commercial Parcels Classification Change, 
August 22, 2011, at 2-3 (PR Comments).
    \12\ Docket No. MC2011-28, Response of the United States Postal 
Service to Public Representative Comments, August 24, 2011, at 2 
(Postal Service Response to PR Comments).
---------------------------------------------------------------------------

    In Docket No. MC2011-5, the Postal Service filed notice pursuant to 
subpart E of proposed amendments to the MCS language for the Outside 
County Periodicals to modify the method of calculating bundle and 
pallet charges for flats that are co-mailed or co-palletized with 
Standard Mail flats.\13\ Though it approved the request, the Commission 
observed that no other category in the Commission's rules suited the 
nature of the request, which involved preparation changes and limited 
adjustments to postage assessment. Order No. 667 at 5.
---------------------------------------------------------------------------

    \13\ See Docket No. MC2011-5, Order Approving Mail 
Classification Changes, February 8, 2011 (Order No. 667).
---------------------------------------------------------------------------

    In Docket No. MC2012-8, the Postal Service filed notice under 
subpart E of amendments to the MCS raising the minimum dollar amount 
required to qualify for a Global Expedited Package Services (GEPS) 
contract.\14\ The Public Representative contended that the proposed 
change was not minor in terms of its effect on small and medium size 
businesses. Order No. 1225 at 2. The Commission approved the request, 
noting that the Public Representative did not allege that the change 
added, removed, or transferred a product, which would trigger the 
filing requirements under subpart B.
---------------------------------------------------------------------------

    \14\ Docket No. MC2012-8, Order Approving Mail Classification 
Change, February 10, 2012 (Order No. 1225).
---------------------------------------------------------------------------

    The foregoing examples illustrate the need for regulations that 
close the gap between modifications brought pursuant to subparts B 
through D and corrections to the product descriptions brought pursuant 
to subpart E. The rules proposed herein are designed to close that gap.

III. Proposed Rules

    The rules proposed in this notice of proposed rulemaking replace 
current subpart E with a new subpart E. The new subpart E establishes 
separate procedures for: (1) Changes to services offered in connection 
with products, and (2) corrections to product descriptions.
    Under current subpart E, every proposed alteration to the MCS is 
made using one of two categorical means. Alterations may be proposed 
either as modifications to the product lists or as corrections to the 
product descriptions in the MCS. The rules proposed herein create an 
additional third categorical means of altering the MCS--changes to the 
product descriptions. It is the Commission's expectation that these 
three categories--modifications, material changes, and minor 
corrections--will provide a comprehensive regime governing all 
alterations to the MCS.
    Subparts B, C, and D will continue to provide procedures for 
modifications to the product lists in the MCS. The rules define 
modification as adding a product to a list, removing a product from a 
list, or moving a product from one list to the other list.\15\ Proposed 
subpart E will provide new rules governing changes to product 
descriptions and modify existing rules governing corrections to product 
descriptions.
---------------------------------------------------------------------------

    \15\ See 39 CFR 3020.30, 39 CFR 3020.50, and 39 CFR 3020.70.
---------------------------------------------------------------------------

    It is the Commission's expectation that when the Postal Service 
proposes to modify the MCS it will file its proposal in one of three 
ways, either as a modification to the product lists under subpart B, a 
change to a product description under subpart E, or a correction to a 
product description also under subpart E. In each instance, the Postal 
Service will need to determine into which category its proposal falls. 
The current rules define a modification as the addition of a product to 
a product list, the removal of a product from a product list, or the 
moving of a product from one list to the other. Thus, the rules 
presuppose that modifications operate at the product level and will not 
just involve changes to product descriptions. By contrast, a change or 
correction to a product description will operate at the sub-product 
level. Under the proposed rules, the Commission expects that the Postal 
Service will employ either the rules for changes to product 
descriptions or the rules for corrections to product descriptions 
whenever it seeks to alter the MCS language for existing products.

A. Changes to Product Descriptions

    The proposed rules distinguish between material changes and minor 
corrections to product descriptions. The proposed rules that apply to 
changes are codified at Sec. Sec.  3020.80 through 3020.83, and apply 
to changes that are material (i.e., not minor) in nature. The 
Commission expects that the Postal Service will make a threshold 
determination in each case as to whether the proposed alteration is 
material or minor in nature when it seeks to alter a product 
description.
    In determining whether a proposed alteration is a material change 
that is subject to the Sec.  3020.80 rules, the most important 
consideration is the degree to which the proposed alteration affects 
the characteristics of the product. The perspectives of the Postal 
Service, mail users, competitors, and stakeholders will be relevant to 
this determination.
    The post office box enhanced services at issue in Docket No. 
MC2012-26 provide an example of the type of alterations to a product 
that would require a filing under the proposed rules governing material 
changes to a product description. In that docket, the Commission 
considered the addition of email notification, street addressing, and 
private carrier package delivery to the existing competitive Post 
Office Box Service product. The MCS product description indicated that 
Post Office Box Service provides the customer with a locked receptacle 
for the receipt of mail during specified hours of access to the 
receptacle.\16\ Under the proposed rules, the enhanced services would 
merit a filing to amend the MCS under Sec.  3020.80. Relevant factors 
to support this conclusion are that the enhanced services significantly 
changed the post office box user experience--in particular by 
permitting customers to receive packages delivered by private 
carriers--and that the enhanced services could significantly impact 
private mail box competitors, who prior to the enhancements 
distinguished their services from post office box service on the basis 
of the similar enhancements that they offered and that the Postal 
Service did not. Numerous competitors submitted comments suggesting 
that the Postal Service would have an unfair competitive advantage if 
it were permitted to offer the enhanced services. Order No. 1657 at 3, 
11-13.\17\ Because the changes to the MCS product description that the 
enhanced services brought about were more than minor corrections, such 
changes would require a filing under the proposed rules pertaining to 
material changes.
---------------------------------------------------------------------------

    \16\ Mail Classification Schedule 1550.1(a).
    \17\ This is not to suggest that the number of comments that a 
proposal receives establishes whether the proposal is a material 
change or a minor correction. However, the existence and content of 
comments from interested persons will provide some evidence of the 
materiality of a proposal.
---------------------------------------------------------------------------

    The proposed rules governing changes to MCS product descriptions 
require the Postal Service to make a showing that is less onerous than 
the showing that is required for modifications to the product lists but 
more robust than the showing that it is required for corrections to MCS 
product descriptions. A recurring challenge in minor correction cases 
has been the Commission's need to obtain sufficient information to 
evaluate the proposal and determine whether it comports with title 39 
and Commission regulations. Under the current rules that apply to

[[Page 69784]]

corrections, the Commission is required to find that the proposed 
corrections are not inconsistent with 39 U.S.C. 3642. 39 CFR 3020.93. 
Commenters have sometimes stated that the Postal Service's notice does 
not provide sufficient supporting justification. See, e.g., PR Comments 
at 3. The proposed rules for material changes address this concern by 
requiring the Postal Service to provide supporting justification that 
describes the change and the rationale for it, explains why the change 
will not result in a violation of statutory and regulatory standards, 
and describes the impact that the change will have on mail users and 
competitors, if applicable.
    Under the proposed rules, the Postal Service will be required to 
file requests to change the MCS no later than 30 days prior to the 
implementation date of the proposed change. This is a longer period 
than the current rules governing corrections, which require that the 
Postal Service provide notice of the correction 15 days prior to the 
effective date. See 39 CFR 3020.91. As commenters have noted, when the 
Postal Service proposes changes to the MCS that are more than minor 
corrections, the 15-day notice period runs the risk of permitting the 
change to occur before the Commission has completed its review. See, 
e.g., PR Comments at 3. The problem has arisen, in part, because the 
Commission has needed to issue information requests to obtain 
sufficient information so that it could make a threshold determination 
as to whether a proposal was properly filed as a minor correction to 
the product description. The Commission anticipates that in most 
instances a 30-day review period for changes will give it and members 
of the public sufficient time to issue any necessary information 
requests, offer comments, and review the request. It also expects that 
the proposed rules, by filling the existing gap between the rules for 
modifications to the product lists and the rules for corrections to the 
MCS product descriptions, will reduce the need for the Commission to 
issue information requests on the threshold question of whether the 
request was filed under the proper rules and will streamline and reduce 
the time that it takes for the Commission to process requests.\18\
---------------------------------------------------------------------------

    \18\ In cases in which commenters have expressed concerns that a 
proposed change is more than a minor correction, the amount of time 
that it has taken for the Commission to complete its review has 
varied. See Docket No. MC2011-5 (95 days); Docket No. MC2011-28 (19 
days); Docket No. MC2012-8 (11 days); and Docket No. MC2012-26 (189 
days).
---------------------------------------------------------------------------

    The proposed rules provide the Commission with a menu of options 
for acting on a request. While the current rules that apply to 
corrections do not delineate what action the Commission may take if a 
proposal is determined to be inconsistent with section 3642, the 
proposed rules indicate that the Commission may approve the proposed 
changes, reject the proposed changes, provide the Postal Service with 
an opportunity to amend the proposed changes, direct the Postal Service 
to file under a different subpart, institute further proceedings, or 
take other appropriate action. This proposed rule is based on a similar 
provision in the Commission's current rules governing modifications to 
the product lists, which provide more guidance in terms of actions that 
the Commission may take.\19\ In addition, a new provision that is not 
currently part of the Commission's rules governing modifications to the 
product lists, but which is included here, permits the Commission to 
redirect requests when it believes the request should be filed under a 
different subpart of part 3020. The Commission expects this will reduce 
the need for it to rely on information requests to make a threshold 
determination as to whether a request was filed under the appropriate 
rules.
---------------------------------------------------------------------------

    \19\ See 39 CFR 3020.30.34, 39 CFR 3020.55, and 39 CFR 3020.75.
---------------------------------------------------------------------------

B. Corrections to Product Descriptions

    The proposed rules modify the existing rules governing corrections 
to MCS product descriptions, which are codified at Sec. Sec.  3020.90 
through 3020.92. The proposed rules codify Commission precedent holding 
that the rules applicable to corrections apply only to corrections to 
the product description that are minor in nature.
    The proposed rules will require the Postal Service, when it files 
notice of a correction to a product description, to explain why the 
correction does not constitute a material change to the product 
description. This will provide the Postal Service with an opportunity 
to explain at the outset why its proposal is a minor correction rather 
than a material change to a product description.
    The proposed rules also require the Postal Service, when it files 
notice of a correction to a product description, to explain why the 
correction is consistent with any applicable provisions of title 39. 
Under the current rules, the Commission is required to make a 
determination that the correction is not inconsistent with section 
3642. 39 CFR 3020.93. However, the current rules do not require the 
Postal Service to provide any justification or explanation to support 
such a Commission finding. Without such information, the Commission has 
found it necessary in past proceedings to request clarifying 
information from the Postal Service to fulfill its regulatory 
responsibilities. The proposed rules' revised approach will provide the 
Postal Service with an opportunity to explain at the outset why its 
proposal is consistent with applicable statutory provisions instead of 
relying on an inquiry process which can complicate the Commission's 
review.
    This approach would also harmonize the Commission's rules for 
reviews of corrections to product descriptions with those governing 
modifications to the product lists. Such rules require the party making 
the request to show that the proposed modification is consistent with 
the relevant statutory provisions and Commission regulations. See 39 
CFR 3020.32, 3020.52, and 3020.72. This is also the better approach for 
reviews of corrections to product descriptions, as the Postal Service 
will, in most cases, have the best information as to the impact that 
the correction will have. The proposed rules require the Postal Service 
to address any possible legal issues when it files its notice. The 
Commission expects that this will give commenters and the Commission 
notice of possible legal issues so that they may be addressed within 
the 15-day window.
    The proposed rules provide the Commission with several options for 
acting on the notice. They provide that the Commission may approve the 
proposed corrections, reject the proposed corrections, provide the 
Postal Service with an opportunity to amend the proposed corrections, 
direct the Postal Service to file under a different subpart, institute 
further proceedings, or take other appropriate action. The Commission 
expects that the rule permitting it to direct the Postal Service to 
file under a different subpart of part 3020 will reduce the need to 
rely on information requests to make a threshold determination as to 
whether a request was filed under the appropriate rules.

IV. Explanation of Proposed Rules

    The following is a section-by-section analysis of the proposed 
rules:
    Proposed Sec.  3020.80 establishes the basic criteria for proposals 
to change product descriptions under subpart E. It indicates that the 
rules apply to material changes, as opposed to minor corrections, to 
MCS product

[[Page 69785]]

descriptions. In determining whether a proposed alteration is a 
material change, the most important consideration is the degree to 
which the proposed alteration affects the characteristics of the 
product. The perspectives of the Postal Service, mail users, 
competitors, and stakeholders will be relevant to this determination. 
Paragraph (a) requires that the Postal Service submit a request to 
change the product description no later than 30 days prior to 
implementing the proposed change. Paragraph (b) indicates that requests 
shall include a copy of the proposed change and supporting 
justification.
    Proposed Sec.  3020.81 delineates the supporting justification that 
the Postal Service is to provide. For all products, this includes a 
description of the changes, the rationale for them, and a description 
of the impact that the changes will have on users of the product and 
competitors. For market dominant products, the Postal Service is also 
required to explain why the changes are not inconsistent with 39 U.S.C. 
3622(d) and 39 CFR part 3010. For competitive products, the Postal 
Service is also required to show that the changes will not result in a 
violation of 39 U.S.C. 3633 and 39 CFR part 3015.
    Proposed Sec.  3020.82 requires that the Commission establish a 
docket, publish notice of the request on its Web site, designate a 
public representative, and provide interested persons with an 
opportunity to comment on the proposed changes.
    Proposed Sec.  3020.83 requires that the Commission, upon review of 
the request and any comments: Approve the proposed changes; reject the 
proposed changes; provide the Postal Service with an opportunity to 
amend the proposed changes; direct the Postal Service to file under a 
different subpart; institute further proceedings; or direct other 
action that the Commission considers appropriate.
    Proposed Sec.  3020.90 establishes the basic criteria for proposals 
to correct product descriptions under subpart E. It indicates that the 
rules apply only to minor corrections of product descriptions in the 
MCS. Paragraph (b) requires the Postal Service to file notice of 
corrections to product descriptions no later than 15 days prior to the 
effective date of the corrections. Paragraph (c) requires that the 
notice explain why the corrections do not constitute material changes 
for purposes of Sec.  3020.80, explain why the corrections are 
consistent with any applicable provision of title 39, and requires the 
Postal Service to include a copy of the proposed corrections.
    Proposed Sec.  3020.91 requires that the Commission establish a 
docket, publish notice of the proposal on its Web site, designate a 
public representative, and provide interested persons with an 
opportunity to comment on the proposal.
    Proposed Sec.  3020.92 requires that the Commission, upon review of 
the notice and any comments: Approve the proposed corrections; reject 
the proposed corrections; provide the Postal Service with an 
opportunity to amend the proposed corrections; direct the Postal 
Service to file under a different subpart; institute further 
proceedings; or take other action that the Commission considers 
appropriate.

V. Comments Requested

    Interested persons are invited to provide written comments 
concerning the proposed rules. Comments may include specific language 
amending the proposed rules.
    Comments are due no later than 30 days after the date of 
publication of this notice in the Federal Register. All comments and 
suggestions received will be available for review on the Commission's 
Web site, http://www.prc.gov. Interested persons are further invited to 
review the submissions and provide follow-up comments and suggestions 
within 15 additional days (that is, within 45 days of the publication 
of this notice in the Federal Register).
    Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is appointed to 
serve as an officer of the Commission (Public Representative) to 
represent the interests of the general public in the above-captioned 
docket.

VI. Ordering Paragraphs

    It is ordered:
    1. Docket No. RM2015-6 is established for the purpose of receiving 
comments with respect to the proposed rules attached to this Order.
    2. The Commission proposes to amend its regulations at part 3020 
subpart E as shown below the signature of the Secretary.
    3. Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is designated 
as an officer of the Commission to represent the interests of the 
general public in this docket.
    4. Interested persons may submit comments no later than 30 days 
after the date of publication of this notice in the Federal Register.
    5. Reply comments may be filed no later than 45 days after the date 
of publication of this notice in the Federal Register.
    6. The Secretary shall arrange for publication of this order in the 
Federal Register in conformance with official publication requirements.

List of Subjects in 39 CFR Part 3020

    Administrative practice and procedure, Postal Service.

    For the reasons discussed in the preamble, the Commission proposes 
to amend chapter III of title 39 of the Code of Federal Regulations as 
follows:

PART 3020--PRODUCT LISTS

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

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

0
2. Revise subpart E of part 3020 to read as follows:
Subpart E--Requests Initiated by the Postal Service to Make Material 
Changes or Minor Corrections to the Mail Classification Schedule
Sec.
3020.80 Material changes to product descriptions.
3020.81 Supporting justification for changes to product 
descriptions.
3020.82 Docket and notice.
3020.83 Commission review.
3020.84-3020.89 [Reserved]
3020.90 Minor corrections to product descriptions.
3020.91 Docket and notice.
3020.92 Commission Review.

Subpart E--Requests Initiated by the Postal Service To Make 
Material Changes or Minor Corrections to the Mail Classification 
Schedule


Sec.  3020.80  Material changes to product descriptions.

    (a) Whenever the Postal Service proposes material changes to a 
product description in the Mail Classification Schedule, no later than 
30 days prior to implementing the proposed changes, it shall submit to 
the Commission a request to change the product description in the Mail 
Classification Schedule.
    (b) The request shall:
    (1) Include a copy of the applicable sections of the Mail 
Classification Schedule and the proposed changes therein in legislative 
format; and
    (2) Provide all supporting justification for the changes upon which 
the Postal Service proposes to rely.


Sec.  3020.81  Supporting justification for changes to product 
descriptions.

    (a) Supporting justification for changes to a product description 
in the Mail Classification Schedule shall include a description of, and 
rationale for, the proposed changes to the product

[[Page 69786]]

description; and the additional material in paragraphs (b) and (c) of 
this section.
    (b)(1) As to market dominant products, explain why the changes are 
not inconsistent with each requirement of 39 U.S.C. 3622(d) and part 
3010 of this chapter; or
    (2) As to competitive products, explain why the changes will not 
result in the violation of any of the standards of 39 U.S.C. 3633 and 
part 3015 of this chapter.
    (c) Describe the impact that the changes will have on users of the 
product and on competitors.


Sec.  3020.82  Docket and notice.

    (a) The Commission shall take the actions identified in paragraphs 
(b) through (e) of this section.
    (b) Establish a docket for each request to change a product 
description in the Mail Classification Schedule;
    (c) Publish notice of the request on its Web site;
    (d) Designate an officer of the Commission to represent the 
interests of the general public in the docket; and
    (e) Provide interested persons with an opportunity to comment on 
whether the proposed changes are consistent with title 39 and 
applicable Commission regulations.


Sec.  3020.83  Commission review.

    (a) The Commission shall review the request and any comments filed. 
The Commission shall take one of the actions identified in paragraphs 
(b) through (g) of this section.
    (b) Approve the proposed changes, subject to editorial corrections;
    (c) Reject the proposed changes;
    (d) Provide the Postal Service with an opportunity to amend the 
proposed changes;
    (e) Direct the Postal Service to make an appropriate filing under a 
different subpart;
    (f) Institute further proceedings; or
    (g) Direct other action that the Commission considers appropriate.


Sec. Sec.  3020.84-3020.89  [Reserved]


Sec.  3020.90  Minor corrections to product descriptions.

    (a) The Postal Service shall ensure that product descriptions in 
the Mail Classification Schedule accurately represent the current 
offerings of the Postal Service.
    (b) The Postal Service shall submit minor corrections to product 
descriptions in the Mail Classification Schedule by filing notice with 
the Commission no later than 15 days prior to the effective date of the 
proposed corrections.
    (c) The notice shall:
    (1) Explain why the proposed corrections do not constitute material 
changes to the product description for purposes of Sec.  3020.80;
    (2) Explain why the proposed corrections are consistent with any 
applicable provisions of title 39; and
    (3) Include a copy of the applicable sections of the Mail 
Classification Schedule and the proposed corrections therein in 
legislative format.


Sec.  3020.91  Docket and notice.

    (a) The Commission shall take the actions identified in paragraphs 
(b) through (e) of this section.
    (b) Establish a docket for each proposal to correct a product 
description in the Mail Classification Schedule;
    (c) Publish notice of the proposal on its Web site;
    (d) Designate an officer of the Commission to represent the 
interests of the general public in the docket; and
    (e) Provide interested persons with an opportunity to comment on 
whether the proposed corrections are consistent with title 39 and 
applicable Commission regulations.


Sec.  3020.92  Commission Review.

    (a) The Commission shall review the notice and any comments filed. 
The Commission shall take one of the actions identified in paragraphs 
(b) through (g) of this section.
    (b) Approve the proposed corrections, subject to editorial 
corrections;
    (c) Reject the proposed corrections;
    (d) Provide the Postal Service with an opportunity to amend the 
proposed corrections;
    (e) Direct the Postal Service to make an appropriate filing under a 
different subpart;
    (f) Institute further proceedings; or
    (g) Direct other action that the Commission considers appropriate.

    By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2014-27589 Filed 11-21-14; 8:45 am]
BILLING CODE 7710-FW-P