Periodic Reporting, 49184-49186 [2015-20232]

Download as PDF 49184 Federal Register / Vol. 80, No. 158 / Monday, August 17, 2015 / Proposed Rules POSTAL REGULATORY COMMISSION R–4403E Stennis Space Center, MS [New] AGENCY: Boundaries. Beginning at lat. 30°29′37″ N., long. 89°35′16″ W.; to lat. 30°29′37″ N., long. 89°32′33″ W.; thence clockwise along a 0.85-M arc centered at lat. 30°28′46″ N., long. 89°32′33″ W.; to lat. 30°28′46″ N., long. 89°31′34″ W.; to lat. 30°26′25″ N., long. 89°31′34″ W.; to lat. 30°24′02″ N., long. 89°31′34″ W.; thence counterclockwise along a 4.2-NM arc centered at lat. 30°22′04″ N., long. 89°27′17″ W.; to lat. 30°22′35″ N., long. 89°32′06″ W.; to lat. 30°22′35″ N., long. 89°35′27″ W.; to lat. 30°27′58″ N., long. 89°35′27″ W,; to lat. 30°28′47″ N., long. 89°35′27″ W.; to the point of beginning. Designated altitudes. Surface to 10,000 feet MSL. Time of designation. Intermittent, 2000 to 0500 local time, as activated by NOTAM at least 24 hours in advance; and 1800 to 2000 local time, November 1 to March 1, as activated by NOTAM at least 24 hours in advance, not to exceed 20 days per year. Controlling agency. FAA, Houston ARTCC. Using agency. U.S. Navy, Commander, Naval Special Warfare Command, Naval Special Warfare N31 Branch, Stennis Space Center, Bay St. Louis, MS. mstockstill on DSK4VPTVN1PROD with PROPOSALS activated by NOTAM at least 24 hours in advance, not to exceed 20 days per year. Controlling agency. FAA, Houston ARTCC. Using agency. U.S. Navy, Commander, Naval Special Warfare Command, Naval Special Warfare N31 Branch, Stennis Space Center, Bay St. Louis, MS. ACTION: R–4403F Stennis Space Center, MS [New] Boundaries. Beginning at lat. 30°29′37″ N., long. 89°35′16″ W.; thence clockwise along a 2.5-NM arc centered at lat. 30°28′46″ N., long. 89°32′33″ W.; to lat. 30°26′25″ N., long. 89°31′34″ W.; to lat. 30°28′46″ N., long. 89°31′34″ W.; thence counterclockwise along a 0.85-NM arc centered at lat. 30°28′46″ N., long. 89°32′33″ W.; to lat. 30°29′37″ N., long. 89°32′33″ W.; to the point of beginning. Designated altitudes. 4,000 feet MSL to 10,000 feet MSL. Time of designation. Intermittent, 2000 to 0500 local time, as activated by NOTAM at least 24 hours in advance; and 1800 to 2000 local time, November 1 to March 1, as activated by NOTAM at least 24 hours in advance, not to exceed 20 days per year. Controlling agency. FAA, Houston ARTCC. Using agency. U.S. Navy, Commander, Naval Special Warfare Command, Naval Special Warfare N31 Branch, Stennis Space Center, Bay St. Louis, MS. Table of Contents * * * * * Issued in Washington, DC, on August 10 2015. Gary A. Norek, Manager, Airspace Policy and Regulations Group. [FR Doc. 2015–20277 Filed 8–14–15; 8:45 am] BILLING CODE 4910–13–P VerDate Sep<11>2014 16:52 Aug 14, 2015 Jkt 235001 39 CFR Part 3050 [Docket No. RM2015–16; Order No. 2654] Periodic Reporting Postal Regulatory Commission. Notice of proposed rulemaking. The Commission is noticing a recent Postal Service filing requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to periodic reports (Proposal Seven). This notice informs the public of the filing, invites public comment, and takes other administrative steps. DATES: Comments are due: September 25, 2015. Reply Comments are due: October 16, 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: SUMMARY: I. Introduction II. Summary of Proposal III. Initial Commission Action IV. Ordering Paragraphs I. Introduction On August 5, 2015, the Postal Service filed a petition pursuant to 39 CFR 3050.11 requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to the Postal Service’s periodic reports.1 Proposal Seven is attached to the Petition and proposes an analytical method change relating to the avoided costs for Flats Sequencing System (FSS) workshare discounts. Petition at 1. This Petition was filed in response to Order No. 2472, which directed the Postal Service ‘‘to file a proposed methodology for determining the costs avoided for the Presorted FSS workshare discounts, as described in the body of [Order No. 2472], within 90 days of the date of [Order No. 2472].’’ 2 1 Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Seven), August 5, 2015 (Petition). 2 Docket No. R2015–4, Order on Revised Price Adjustments for Standard Mail, Periodicals, and PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 II. Summary of Proposal Under Proposal Seven, the Postal Service seeks to address the avoided costs relating to FSS mail. Petition, Proposal Seven at 1. The Postal Service bifurcates Proposal Seven into the Mail Processing and the Delivery elements of the avoided costs for FSS workshare discounts. Id. A. Section One: Proposed Method for Calculating Mail Processing Cost Avoidances The Postal Service seeks to modify the modeling methodology used in the USPS–FY14–11 (Docket No. ACR2014) Standard Mail Flats Mail Processing Cost Model to estimate the mail processing cost avoidances of FSS presorted Standard Flats. Petition, Proposal Seven, Section One at 1. The Postal Service expands the Standard Mail Flats Mail Processing Cost Model to identify the unique characteristics and flows of FSS-prepared Standard Flats. Id. As part of Library Reference USPS–RM2015–16/1 filed with the Petition, the Postal Service provides three models supporting this section of Proposal Seven. Id. The Postal Service also proposes changes to the USPS– FY14–11 (Docket No. ACR2014) Periodicals Flats Mail Processing Cost Model. Id. at 4.3 There are nine modifications proposed by the Postal Service in Section One of Proposal Seven, all of which apply to the Standard Mail Flats Cost Model. Petition, Proposal Seven, Section One at 4. Two of the proposed modifications also apply to the Periodicals Model. Id. 1. Revision of the Methodology Used To Estimate the Proportion of Flats Processed in Mechanized Incoming Secondary Operations (Modification One) The Postal Service presents a process to estimate the proportion of flat-shaped mail processed in mechanized incoming secondary operations. Id. at 4–8. Although over 98 percent of flats destinate in the service territories of plants that have mechanized equipment, certain facilities choose to perform the incoming secondary sortation manually for a variety of reasons, including low volume, service commitments, and Package Services Products and Related Mail Classification Changes, May 7, 2015, at 62 (Order No. 2472). 3 The proposed changes to the Periodicals Flats Mail Processing Cost Model were filed in Docket No. RM2015–18. See Docket No. RM2015–18, Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Nine), August 5, 2015, Attachment at 2. E:\FR\FM\17AUP1.SGM 17AUP1 Federal Register / Vol. 80, No. 158 / Monday, August 17, 2015 / Proposed Rules operating window/capacity restraints. Id. at 4–5. The Postal Service asserts that its proposed methodology accounts for the two different technologies performing mechanized incoming secondary sortation—the Automated Flats Sorting Machine 100 (AFSM 100) and the FSS. Id. at 5. The Postal Service also represents that its methodology excludes letter shaped mail worked in flat operations, pieces entered in Carrier Route bundles that have broken and therefore require incoming secondary sortation, rejects from FSS operations, and pieces destinating in FSS zones that are not sorted on the FSS. See id. at 5– 8. This modification applies to both the Standard Mail and Periodicals Flats Mail Processing Cost Models. 2. Changes to Bundle Processing Flows To Account for Increased Mechanized Incoming Secondary Piece Processing The Postal Service proposes to adjust the bundle flow formulae for consistency with the mechanized incoming secondary piece distribution calculated under Modification One. See id. at 8–9. The Postal Service states that bundles for mechanized incoming secondary sortation will not incur an incoming secondary bundle sort. See id. The Postal Service explains that bundles for zones worked manually will incur an additional bundle sort at the delivery unit. Id. at 9. This modification applies to the Standard Mail Flats Mail Processing Cost Model. mstockstill on DSK4VPTVN1PROD with PROPOSALS 3. Introduction of FSS Bundle Flows The Postal Service assumes that no FSS bundles will incur a sortation at the delivery unit. Id. Aside from this assumption, the Postal Service calculates the bundle flows for FSS bundles using the same methodology used for other bundle types. Id. This modification applies to the Standard Mail Flats Mail Processing Cost Model. 4. FSS Presort Piece Model and Costs The Postal Service states that FSS presorted pieces flow directly into piece sortation on the FSS, bypassing outgoing primary, outgoing secondary, managed mail, and incoming primary operations. Id. The Postal Service represents that it models such FSS presorted pieces using the same basic methodology previously used to model piece flows. Id. This modification applies to the Standard Mail Flats Mail Processing Cost Model. 5. Updating 5-Digit Piece Model and Costs The Postal Service represents that 5Digit pieces do not flow into FSS operations and proposes to update the VerDate Sep<11>2014 16:52 Aug 14, 2015 Jkt 235001 49185 5-Digit piece model to reflect this flow. Id. at 10. The Postal Service represents that the relative incidence of manual incoming secondary sortation is higher for 5-Digit pieces by a factor of one over one minus the FSS coverage factor. Id. This modification applies to the Standard Mail Flats Mail Processing Cost Model. this FSS Realization Factor captures the fact that mail that destinates in a FSS zone and arrives after the end of firstpass processing may be processed on the AFSM 100 rather than the FSS to avoid delay. Id. This modification applies to both the Standard Mail and Periodicals Flats Mail Processing Cost Models. 6. Updating Mixed ADC, ADC, 3-Digit for Incoming Secondary Coverage The Postal Service proposes to update the area distribution center (ADC), mixed ADC, and 3-Digit models to incorporate the recalculation of the mechanized incoming secondary sortation. Id. This modification applies to the Standard Mail Flats Mail Processing Cost Model. B. Section Two: Proposed Method for Calculating Delivery Costs 7. Explicit Modeling of Mail Preparation The Postal Service states that the current model includes the hours associated with mail preparation for the FSS in the calculation of the FSS productivities. See id. at 11. However, because such AFSM 100 preparation costs are included in the calculation of the AFSM 100 productivities, the Postal Service observes that a portion of the AFSM 100 preparation costs are allocated incorrectly to FSS prepared pieces through the Cost and Revenue Analysis (CRA) adjustment factor. See id. The Postal Service proposes to model AFSM 100 preparation costs using the methodology used in the Periodicals Flats Mail Processing Model. See id. This modification applies to the Standard Mail Flats Mail Processing Cost Model. 8. CRA Adjustment Factor Adjusted for the FSS The Postal Service uses the CRA adjustment factor to calibrate the model to CRA costs and to distribute nonmodeled costs to the appropriate rate category. Id. The Postal Service states that applying the CRA adjustment factor as is done in the current methodology would distort measured cost avoidances by overdistributing non-modeled costs to FSS pieces. Id. at 12. The Postal Service represents that it will calculate the CRA adjustment factor to ensure the non-modeled costs distributed to FSS pieces are equal to those distributed to Five-Digit pieces. Id. This modification applies to the Standard Mail Flats Mail Processing Cost Model. 9. FSS Realization Factor The Postal Service represents that it introduced a FSS Realization Factor to measure the proportion of FSS eligible mail that is processed on the FSS. Id. at 12–13. According to the Postal Service, PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 The Postal Service proposes a method to disaggregate delivery costs for Periodicals Flats, Bound Printed Matter Flats, Standard Flats and Carrier Route Flats (not including High Density or Saturation) between those destinating in FSS zones and those destinating in nonFSS zones. Petition, Proposal Seven: Section Two at 1. This method uses operational assumptions and models rather than data directly collected from cost systems, and calculates separate delivery costs for the relevant products based on whether pieces are destinating in FSS or non-FSS zones. Id. at 3. The proposed computing method begins with a product’s component group costs in three segments: Cost Segment 6, City Carrier In-Office Activities; Cost Segment 7, City Carrier Street Activities; and Cost Segment 10, Rural Carriers Office and Street Activities. Id. at 3–9. Within each cost segment, the purpose is to disaggregate costs into FSS zone costs and non-FSS zone costs. Id. III. Initial Commission Action The Commission establishes Docket No. RM2015–16 for consideration of matters raised by the Petition. Additional information concerning the Petition may be accessed via the Commission’s Web site at http:// www.prc.gov. Interested persons may submit comments on the Petition and Proposal Seven no later than September 25, 2015. Reply comments are due no later than October 16, 2015. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin is designated as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding. IV. Ordering Paragraphs It is ordered: 1. The Commission establishes Docket No. RM2015–16 for consideration of the matters raised by the Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Seven), filed August 5, 2015. E:\FR\FM\17AUP1.SGM 17AUP1 49186 Federal Register / Vol. 80, No. 158 / Monday, August 17, 2015 / Proposed Rules 2. Comments are due no later than September 25, 2015. Reply comments are due no later than October 16, 2015. 3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. Clendenin to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket. 4. The Secretary shall arrange for publication of this Order in the Federal Register. By the Commission. Ruth Ann Abrams, Acting Secretary. [FR Doc. 2015–20232 Filed 8–14–15; 8:45 am] BILLING CODE 7710–FW–P POSTAL REGULATORY COMMISSION 39 CFR Part 3050 [Docket No. RM2015–18; Order No. 2655] Periodic Reporting Postal Regulatory Commission. Notice of proposed rulemaking. AGENCY: ACTION: The Commission is noticing a recent Postal Service filing requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to periodic reports (Proposal Nine). This notice informs the public of the filing, invites public comment, and takes other administrative steps. DATES: Comments are due: September 8, 2015. Reply Comments are due: September 22, 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: FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202–789–6820. SUPPLEMENTARY INFORMATION: mstockstill on DSK4VPTVN1PROD with PROPOSALS Table of Contents I. Introduction II. Summary of Proposal III. Initial Commission Action IV. Ordering Paragraphs I. Introduction On August 5, 2015, the Postal Service filed a petition pursuant to 39 CFR 3050.11 requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to the VerDate Sep<11>2014 16:52 Aug 14, 2015 Jkt 235001 Postal Service’s periodic reports.1 Proposal Nine is attached to the Petition and proposes an analytical method change relating to bottom-up costs for new Periodicals Mail Carrier Route bundle and container entry options. Petition at 1. This Petition was filed in response to Order No. 2472, which directed the Postal Service to ‘‘. . . file a proposed methodology for determining the bottom-up costs for the new Periodicals Mail Carrier Route bundle and container entry options, as described in the body of [Order No. 2472], within 90 days of the date of [Order No. 2472].’’ 2 II. Summary of Proposal Under Proposal Nine, the Postal Service asserts that no changes to the methodology used to produce avoided cost estimates for Periodicals Mail Carrier Route bundle and container entry options is necessary and instead proposes changes to the model presentation that explicitly identify the bottom-up costs of processing Carrier Route pallets. Petition, Proposal Nine at 1, 2. When a mailing has sufficient density to prepare 5-Digit or 5-Digit Scheme pallets, the mailer presorts nearly all of the mail on the pallet into Carrier Route bundles. Id. at 1. The Postal Service represents that in Fiscal Year 2014, only one-half of one percent of the periodicals on such pallets were prepared in 5-Digit bundles. Id. The Postal Service states that the 5-Digit mail on these pallets generally consists of residual pieces for the few routes that lack sufficient density to qualify for Carrier Route rates. Id. The Postal Service represents that for this reason it processes Carrier Route pallets (5-Digit or 5-Digit Scheme pallets containing only Carrier Route bundles) identically to other 5-Digit pallets. Id. at 1–2. The Postal Service explains that all pallets are cross-docked to the delivery unit for distribution of bundles to carriers. Id. at 2. The Postal Service states that the Carrier Route pallet rate encourages mailers to prepare Carrier Route pallets and to move any residual 5-Digit bundles to containers that would be distributed in the plant. Id. The Postal Service represents this enables it to process the residual 5-Digit bundles on the Automated Flats Sorting Machine 1 Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Nine), August 5, 2015 (Petition). 2 Docket No. R2015–4, Order on Revised Price Adjustments for Standard Mail, Periodicals, and Package Services Products and Related Mail Classification Changes, May 7, 2015, at 63 (Order No. 2472). PO 00000 Frm 00014 Fmt 4702 Sfmt 9990 100, rather than via manual processing. Id. According to the Postal Service, because the processing of Carrier Route pallets and other 5-Digit pallets does not differ, it proposes no changes to the methodology used to produce estimates of avoided costs. Id. The Postal Service represents that the changes it proposes to the USPS–FY14–11 Periodicals Model in Docket No. ACR2014 explicitly identify the costs avoided. Id. Further, the Postal Service states that it has incorporated Modifications 1 and 9, described in Section One of Proposal Seven,3 into the Periodicals Model filed with the Petition as an Excel spreadsheet. Id. III. Initial Commission Action The Commission establishes Docket No. RM2015–18 for consideration of matters raised by the Petition. Additional information concerning the Petition may be accessed via the Commission’s Web site at http:// www.prc.gov. Interested persons may submit comments on the Petition and Proposal Nine no later than September 8, 2015. Reply comments are due no later than September 22, 2015. Pursuant to 39 U.S.C. 505, Lawrence Fenster is designated as officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding. IV. Ordering Paragraphs It is ordered: 1. The Commission establishes Docket No. RM2015–18 for consideration of the matters raised by the Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Nine), filed August 5, 2015. 2. Comments are due no later than September 8, 2015. Reply comments are due no later than September 22, 2015. 3. Pursuant to 39 U.S.C. 505, the Commission appoints Lawrence Fenster to serve as officer of the Commission (Public Representative) to represent the interests of the general public in this docket. 4. The Secretary shall arrange for publication of this order in the Federal Register. By the Commission. Ruth Ann Abrams, Acting Secretary. [FR Doc. 2015–20233 Filed 8–14–15; 8:45 am] BILLING CODE 7710–FW–P 3 Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Seven), August 5, 2015 (Proposal Seven). E:\FR\FM\17AUP1.SGM 17AUP1

Agencies

[Federal Register Volume 80, Number 158 (Monday, August 17, 2015)]
[Proposed Rules]
[Pages 49184-49186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-20232]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2015-16; Order No. 2654]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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

SUMMARY: The Commission is noticing a recent Postal Service filing 
requesting that the Commission initiate an informal rulemaking 
proceeding to consider changes to analytical principles relating to 
periodic reports (Proposal Seven). This notice informs the public of 
the filing, invites public comment, and takes other administrative 
steps.

DATES: Comments are due: September 25, 2015. Reply Comments are due: 
October 16, 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: 

Table of Contents

I. Introduction
II. Summary of Proposal
III. Initial Commission Action
IV. Ordering Paragraphs

I. Introduction

    On August 5, 2015, the Postal Service filed a petition pursuant to 
39 CFR 3050.11 requesting that the Commission initiate an informal 
rulemaking proceeding to consider changes to analytical principles 
relating to the Postal Service's periodic reports.\1\ Proposal Seven is 
attached to the Petition and proposes an analytical method change 
relating to the avoided costs for Flats Sequencing System (FSS) 
workshare discounts. Petition at 1.
---------------------------------------------------------------------------

    \1\ Petition of the United States Postal Service for the 
Initiation of a Proceeding to Consider Proposed Changes in 
Analytical Principles (Proposal Seven), August 5, 2015 (Petition).
---------------------------------------------------------------------------

    This Petition was filed in response to Order No. 2472, which 
directed the Postal Service ``to file a proposed methodology for 
determining the costs avoided for the Presorted FSS workshare 
discounts, as described in the body of [Order No. 2472], within 90 days 
of the date of [Order No. 2472].'' \2\
---------------------------------------------------------------------------

    \2\ Docket No. R2015-4, Order on Revised Price Adjustments for 
Standard Mail, Periodicals, and Package Services Products and 
Related Mail Classification Changes, May 7, 2015, at 62 (Order No. 
2472).
---------------------------------------------------------------------------

II. Summary of Proposal

    Under Proposal Seven, the Postal Service seeks to address the 
avoided costs relating to FSS mail. Petition, Proposal Seven at 1. The 
Postal Service bifurcates Proposal Seven into the Mail Processing and 
the Delivery elements of the avoided costs for FSS workshare discounts. 
Id.

A. Section One: Proposed Method for Calculating Mail Processing Cost 
Avoidances

    The Postal Service seeks to modify the modeling methodology used in 
the USPS-FY14-11 (Docket No. ACR2014) Standard Mail Flats Mail 
Processing Cost Model to estimate the mail processing cost avoidances 
of FSS presorted Standard Flats. Petition, Proposal Seven, Section One 
at 1. The Postal Service expands the Standard Mail Flats Mail 
Processing Cost Model to identify the unique characteristics and flows 
of FSS-prepared Standard Flats. Id. As part of Library Reference USPS-
RM2015-16/1 filed with the Petition, the Postal Service provides three 
models supporting this section of Proposal Seven. Id. The Postal 
Service also proposes changes to the USPS-FY14-11 (Docket No. ACR2014) 
Periodicals Flats Mail Processing Cost Model. Id. at 4.\3\
---------------------------------------------------------------------------

    \3\ The proposed changes to the Periodicals Flats Mail 
Processing Cost Model were filed in Docket No. RM2015-18. See Docket 
No. RM2015-18, Petition of the United States Postal Service for the 
Initiation of a Proceeding to Consider Proposed Changes in 
Analytical Principles (Proposal Nine), August 5, 2015, Attachment at 
2.
---------------------------------------------------------------------------

    There are nine modifications proposed by the Postal Service in 
Section One of Proposal Seven, all of which apply to the Standard Mail 
Flats Cost Model. Petition, Proposal Seven, Section One at 4. Two of 
the proposed modifications also apply to the Periodicals Model. Id.
1. Revision of the Methodology Used To Estimate the Proportion of Flats 
Processed in Mechanized Incoming Secondary Operations (Modification 
One)
    The Postal Service presents a process to estimate the proportion of 
flat-shaped mail processed in mechanized incoming secondary operations. 
Id. at 4-8. Although over 98 percent of flats destinate in the service 
territories of plants that have mechanized equipment, certain 
facilities choose to perform the incoming secondary sortation manually 
for a variety of reasons, including low volume, service commitments, 
and

[[Page 49185]]

operating window/capacity restraints. Id. at 4-5. The Postal Service 
asserts that its proposed methodology accounts for the two different 
technologies performing mechanized incoming secondary sortation--the 
Automated Flats Sorting Machine 100 (AFSM 100) and the FSS. Id. at 5. 
The Postal Service also represents that its methodology excludes letter 
shaped mail worked in flat operations, pieces entered in Carrier Route 
bundles that have broken and therefore require incoming secondary 
sortation, rejects from FSS operations, and pieces destinating in FSS 
zones that are not sorted on the FSS. See id. at 5-8. This modification 
applies to both the Standard Mail and Periodicals Flats Mail Processing 
Cost Models.
2. Changes to Bundle Processing Flows To Account for Increased 
Mechanized Incoming Secondary Piece Processing
    The Postal Service proposes to adjust the bundle flow formulae for 
consistency with the mechanized incoming secondary piece distribution 
calculated under Modification One. See id. at 8-9. The Postal Service 
states that bundles for mechanized incoming secondary sortation will 
not incur an incoming secondary bundle sort. See id. The Postal Service 
explains that bundles for zones worked manually will incur an 
additional bundle sort at the delivery unit. Id. at 9. This 
modification applies to the Standard Mail Flats Mail Processing Cost 
Model.
3. Introduction of FSS Bundle Flows
    The Postal Service assumes that no FSS bundles will incur a 
sortation at the delivery unit. Id. Aside from this assumption, the 
Postal Service calculates the bundle flows for FSS bundles using the 
same methodology used for other bundle types. Id. This modification 
applies to the Standard Mail Flats Mail Processing Cost Model.
4. FSS Presort Piece Model and Costs
    The Postal Service states that FSS presorted pieces flow directly 
into piece sortation on the FSS, bypassing outgoing primary, outgoing 
secondary, managed mail, and incoming primary operations. Id. The 
Postal Service represents that it models such FSS presorted pieces 
using the same basic methodology previously used to model piece flows. 
Id. This modification applies to the Standard Mail Flats Mail 
Processing Cost Model.
5. Updating 5-Digit Piece Model and Costs
    The Postal Service represents that 5-Digit pieces do not flow into 
FSS operations and proposes to update the 5-Digit piece model to 
reflect this flow. Id. at 10. The Postal Service represents that the 
relative incidence of manual incoming secondary sortation is higher for 
5-Digit pieces by a factor of one over one minus the FSS coverage 
factor. Id. This modification applies to the Standard Mail Flats Mail 
Processing Cost Model.
6. Updating Mixed ADC, ADC, 3-Digit for Incoming Secondary Coverage
    The Postal Service proposes to update the area distribution center 
(ADC), mixed ADC, and 3-Digit models to incorporate the recalculation 
of the mechanized incoming secondary sortation. Id. This modification 
applies to the Standard Mail Flats Mail Processing Cost Model.
7. Explicit Modeling of Mail Preparation
    The Postal Service states that the current model includes the hours 
associated with mail preparation for the FSS in the calculation of the 
FSS productivities. See id. at 11. However, because such AFSM 100 
preparation costs are included in the calculation of the AFSM 100 
productivities, the Postal Service observes that a portion of the AFSM 
100 preparation costs are allocated incorrectly to FSS prepared pieces 
through the Cost and Revenue Analysis (CRA) adjustment factor. See id. 
The Postal Service proposes to model AFSM 100 preparation costs using 
the methodology used in the Periodicals Flats Mail Processing Model. 
See id. This modification applies to the Standard Mail Flats Mail 
Processing Cost Model.
8. CRA Adjustment Factor Adjusted for the FSS
    The Postal Service uses the CRA adjustment factor to calibrate the 
model to CRA costs and to distribute non-modeled costs to the 
appropriate rate category. Id. The Postal Service states that applying 
the CRA adjustment factor as is done in the current methodology would 
distort measured cost avoidances by overdistributing non-modeled costs 
to FSS pieces. Id. at 12. The Postal Service represents that it will 
calculate the CRA adjustment factor to ensure the non-modeled costs 
distributed to FSS pieces are equal to those distributed to Five-Digit 
pieces. Id. This modification applies to the Standard Mail Flats Mail 
Processing Cost Model.
9. FSS Realization Factor
    The Postal Service represents that it introduced a FSS Realization 
Factor to measure the proportion of FSS eligible mail that is processed 
on the FSS. Id. at 12-13. According to the Postal Service, this FSS 
Realization Factor captures the fact that mail that destinates in a FSS 
zone and arrives after the end of first-pass processing may be 
processed on the AFSM 100 rather than the FSS to avoid delay. Id. This 
modification applies to both the Standard Mail and Periodicals Flats 
Mail Processing Cost Models.

B. Section Two: Proposed Method for Calculating Delivery Costs

    The Postal Service proposes a method to disaggregate delivery costs 
for Periodicals Flats, Bound Printed Matter Flats, Standard Flats and 
Carrier Route Flats (not including High Density or Saturation) between 
those destinating in FSS zones and those destinating in non-FSS zones. 
Petition, Proposal Seven: Section Two at 1. This method uses 
operational assumptions and models rather than data directly collected 
from cost systems, and calculates separate delivery costs for the 
relevant products based on whether pieces are destinating in FSS or 
non-FSS zones. Id. at 3.
    The proposed computing method begins with a product's component 
group costs in three segments: Cost Segment 6, City Carrier In-Office 
Activities; Cost Segment 7, City Carrier Street Activities; and Cost 
Segment 10, Rural Carriers Office and Street Activities. Id. at 3-9. 
Within each cost segment, the purpose is to disaggregate costs into FSS 
zone costs and non-FSS zone costs. Id.

III. Initial Commission Action

    The Commission establishes Docket No. RM2015-16 for consideration 
of matters raised by the Petition. Additional information concerning 
the Petition may be accessed via the Commission's Web site at http://www.prc.gov. Interested persons may submit comments on the Petition and 
Proposal Seven no later than September 25, 2015. Reply comments are due 
no later than October 16, 2015. Pursuant to 39 U.S.C. 505, Katalin K. 
Clendenin is designated as an officer of the Commission (Public 
Representative) to represent the interests of the general public in 
this proceeding.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. RM2015-16 for 
consideration of the matters raised by the Petition of the United 
States Postal Service for the Initiation of a Proceeding to Consider 
Proposed Changes in Analytical Principles (Proposal Seven), filed 
August 5, 2015.

[[Page 49186]]

    2. Comments are due no later than September 25, 2015. Reply 
comments are due no later than October 16, 2015.
    3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. 
Clendenin to serve as an officer of the Commission (Public 
Representative) to represent the interests of the general public in 
this docket.
    4. The Secretary shall arrange for publication of this Order in the 
Federal Register.

    By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2015-20232 Filed 8-14-15; 8:45 am]
 BILLING CODE 7710-FW-P