Periodic Reporting Requirements, 49286-49295 [2018-21249]
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Federal Register / Vol. 83, No. 190 / Monday, October 1, 2018 / Rules and Regulations
(8) There may be times that the Ninth
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(e) Notification. The Coast Guard will
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Dated: September 24, 2018.
J.M. Nunan,
Rear Admiral, U.S. Coast Guard, Commander,
Ninth Coast Guard District.
[FR Doc. 2018–21132 Filed 9–28–18; 8:45 am]
BILLING CODE 9110–04–P
POSTAL REGULATORY COMMISSION
39 CFR Part 3050
[Docket No. RM2018–2; Order No. 4836]
Periodic Reporting Requirements
Postal Regulatory Commission.
Final rule.
AGENCY:
ACTION:
The Commission adopts final
rules revising periodic reporting
requirements codified in our
regulations. The final rules amend
several existing sections of our
regulations, and add several subsections
to our regulations.
DATES: Effective: October 31, 2018.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
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SUMMARY:
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SUPPLEMENTARY INFORMATION:
Regulatory History
83 FR 33879 (Jul. 18, 2018)
83 FR 1320 (Jan. 11, 2018)
Table of Contents
I. Introduction
II. Background
III. Comments
IV. Commission Analysis
V. Changes to the Proposed Rules
VI. Ordering Paragraphs
I. Introduction
In this Order, the Commission adopts
final rules revising periodic reporting
requirements codified in 39 CFR part
3050. The final rules adopted by this
Order amend existing rules by adjusting
the deadlines of certain quarterly and
monthly reports, modifying the format
of the Monthly Summary Financial
Report, and adding or removing certain
reporting requirements. The final rules
amend several existing sections of 39
CFR part 3050, and add several
subsections to § 3050.21.
II. Background
On December 27, 2017, the Postal
Service requested that the Commission
initiate a rulemaking proceeding to
consider revisions to the periodic
reporting requirements codified in 39
CFR part 3050.1 On January 5, 2018, the
Commission established this docket and
invited comments and reply comments
regarding the Postal Service’s proposed
revisions.2 The Commission received
comments from the Public
Representative 3 and the United Parcel
Service, Inc. (UPS).4 The Commission
received reply comments from the
Postal Service 5 and the Parcel Shippers
Association (PSA).6
The Postal Service’s petition
contained three requests. First, the
Postal Service requested that the
Commission adjust deadlines for the
1 United States Postal Service Petition for
Rulemaking on Periodic Reporting, December 27,
2017 (Petition).
2 Advance Notice of Proposed Rulemaking to
Revise Periodic Reporting Requirements, January 5,
2018 (Order No. 4374). The Advance Notice of
Proposed Rulemaking to Revise Periodic Reporting
Requirements was published in the Federal
Register on January 11, 2018. See 83 FR 1320
(January 11, 2018).
3 Public Representative Comments on Advance
Notice of Proposed Rulemaking to Revise Periodic
Reporting Requirements, March 7, 2018 (March 7
PR Comments).
4 Comments of United Parcel Service, Inc. on
Advance Notice of Proposed Rulemaking to Revise
Periodic Reporting Requirements, March 7, 2018
(March 7 UPS Comments).
5 Reply Comments of the United States Postal
Service, April 6, 2018 (Postal Service Reply
Comments).
6 Reply Comments of the Parcel Shippers
Association (PSA), April 6, 2018.
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quarterly Revenue, Pieces, and Weight
(RPW) report; the Quarterly Statistics
Report (QSR); the quarterly Billing
Determinants report; and the monthly
National Consolidated Trial Balance and
Revenue and Expense Summary (Trial
Balance) report to align the deadlines
with other financial reporting deadlines.
Petition at 1. The Postal Service stated
that aligning the deadlines would be
more effective, as the current rules
require the reports to be submitted
before key information is available. Id.
at 3–5.
Second, the Postal Service requested
that the Commission change the format
of the Monthly Summary Financial
Report. Id. at 6. The Postal Service
sought to revise § 3050.28(b)(1), Table 1
and Table 2. For Table 1, the Postal
Service requested a change of the term
‘‘Operating Revenue’’ to ‘‘Revenue,’’ and
to remove a breakdown of types of
operating revenue. Id. at 6–8. For Table
2, the Postal Service requested to update
the product name for USPS Marketing
Mail, as the previous format used the
old product name of Standard Mail. Id.
at 8.
Third, the Postal Service requested
that the Commission remove any
requirements deemed unnecessary to
the Commission’s evaluation of
compliance with title 39. Id. at 9–10.
The Commission considered the
comments it received in response to
Order No. 4706 and reviewed its
periodic reporting rules to determine if
updates were warranted, and as a result
proposed revisions to the rules.7 The
revisions incorporated the Postal
Service’s proposal to adjust the filing
date for the RPW, QSR, Billing
Determinants, and Trial Balance
reports.8
The proposed rules also changed the
format of the Monthly Summary
Financial Report. In § 3050.28(b)(1),
Table 1, the existing input for
‘‘Operating Revenue’’ remains, but
component inputs ‘‘Mail and Services
Revenue’’ and ‘‘Government
Appropriations’’ were removed. A new
heading, ‘‘Revenue,’’ contains an input
for ‘‘Operating Revenue,’’ a new input
for ‘‘Other Revenue,’’ and an input for
their combined ‘‘Total Revenue.’’ 9
7 Notice of Proposed Rulemaking to Revise the
Periodic Reporting Requirements, July 12, 2018
(Order No. 4706). The Notice of Proposed
Rulemaking to Revise the Periodic Reporting
Requirements was published in the Federal
Register on July 18, 2018. See 83 FR 33879 (July
18, 2018).
8 See Order No. 4706 at 8–10, part IV.B, proposed
sections 3050.25(c)–(e), 3050.28(c).
9 Id. at 10–11, part IV.C. Although Order No. 4706
explained this change, the proposed Table 1
inadvertently failed to reflect the change, omitting
the new ‘‘Total Revenue’’ input.
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Proposed changes to Table 2 included a
replacement of the current input
‘‘Standard Mail’’ to ‘‘USPS Marketing
Mail,’’ and the replacement of the
‘‘Total All Mail’’ input and its
components with distinct inputs for
‘‘Total Volume’’ and ‘‘Total Operating
Revenue.’’ 10
In Order No. 4706, the Commission
also explained several modifications to
the existing rules that the Commission
deemed necessary to increase the
efficiency and decrease the
administrative burden, for both the
Postal Service and the Commission, of
the Annual Compliance Determination
(ACD) process. Id. at 13. The proposed
rules added a requirement that the
Postal Service file documentation with
its Annual Compliance Report (ACR)
showing that non-compensatory market
dominant negotiated service agreements
(NSAs) improve the Postal Service’s net
financial position or enhance the
performance of mail preparation,
processing, transportation, or other
functions.11
Proposed § 3050.21(j) replaced the
existing section requiring the Postal
Service to provide any information it
believes will assist the Commission in
evaluating compliance with title 39. The
Commission’s proposed rules
renumbered that requirement as
§ 3050.21(n), and revised § 3050.21(j) to
require that the Postal Service provide
a distribution breakdown of mail fees
for market dominant and competitive
products.12
Proposed § 3050.21(k) added a
requirement that the Postal Service
provide in its annual filing any thirdparty service performance results where
a financial penalty or bonus is applied,
and to provide the amount of any
forfeited revenue.13
Proposed § 3050.21(l) added a
requirement that the Postal Service
provide all total workhour data and data
sources, showing workhour
measurements by Labor Distribution
Code.14
In proposed § 3050.21(m), the
Commission added a requirement that
the Postal Service provide with its ACR
Inbound Letter Post 15 revenue, volume,
attributable cost, and contribution data
aggregated by Universal Postal Union
(UPU) country group and by shape for
the preceding five fiscal years.16
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10 Id.
at 12, proposed section 3050.28(b)(1), Table
2.
11 Id.
at 13–14, proposed § 3050.21(f)(6).
at 14, proposed § 3050.21(j).
13 Id. at 15, proposed § 3050.21(k).
14 Id. at 15–16, proposed § 3050.21(l).
15 ‘‘Inbound Letter Post’’ as defined in the Mail
Classification Schedule (MCS) section 1130.
16 Id. at 16–18, proposed § 3050.21(m).
12 Id.
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The Commission’s proposed rules
also removed a requirement from
§ 3050.60. Id. at 19. The current
§ 3050.60(c) requires the Postal Service
to provide hard and electronic copies of
any publications or handbooks, data
collection forms, and training
handbooks whenever they are changed.
The Commission, finding that providing
a hard-copy form might create
unnecessary administrative effort,
proposed to remove the requirement of
providing those publications in hardcopy form.17
In Order No. 4706, the Commission
invited comments on the proposal from
interested parties. Id.
III. Comments
In response to Order No. 4706, the
Commission received comments from
the Postal Service,18 UPS,19 the Public
Representative,20 the U.S. Chamber of
Commerce,21 and the National
Association of Manufacturers (NAM).22
Postal Service Comments. The Postal
Service supports the proposed rules
regarding deadlines for periodic reports,
the format of the Monthly Summary
Financial Report, and the removal of the
requirement that the Postal Service
produce hard copies of updated
publications or handbooks.23
The Postal Service agrees in theory
that including in the initial ACR filing
certain information it routinely provides
in response to information requests
would improve efficiency. Id. at 4. The
Postal Service notes that for information
regarding non-compensatory bilateral
agreements, international product thirdparty service performance, and total
workhour and related data by Labor
Distribution Code, the Postal Service
has provided the reports as additional
17 Id.
at 19, proposed § 3050.60(c).
States Postal Service Comments
Regarding Order No. 4706, August 17, 2018 (Postal
Service Comments).
19 Comments of United Parcel Service, Inc. on
Notice of Proposed Rulemaking to Revise the
Periodic Reporting Requirements, August 17, 2018
(August 17 UPS Comments).
20 Public Representative Comments on Notice of
Proposed Rulemaking to Revise Periodic Reporting
Requirements, August 17, 2018 (August 17 PR
Comments).
21 Comments of the U.S. Chamber of Commerce,
August 17, 2018 (Chamber of Commerce
Comments).
22 Comments of National Association of
Manufacturers, August 17, 2018 (NAM Comments).
23 Postal Service Comments at 3–4. The Postal
Service identifies two minor issues with proposed
§ 3050.28(b)(1), Table 1. In Order No. 4706, the
Commission indicated it would include an input for
‘‘Total Revenue’’ but the input is not in the
proposed Table 1. Also, existing input ‘‘Net
Operating Income’’ appears as ‘‘New Operating
Income’’ in the proposed Table 1. The Postal
Service recommends correcting Table 1 consistent
with the explanation in Order No. 4706. Id. at 4.
18 United
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components of existing ACR folders. Id.
at 4–5. However, for fee distribution
information required by proposed
§ 3050.21(j), the Postal Service notes
that in Docket Nos. ACR2015, ACR2016,
and ACR2017, the format of the
information varied. Id. at 5. The Postal
Service states that the format varied due
to foreseeable changes in circumstances,
including new products, new product
names, price adjustments, and transfers.
Id. The Postal Service suggests that if
the Commission desires to specify the
format for fee distribution report each
year, the existing Chairman’s
Information Request procedure would
be most appropriate. Id. at 6.
Alternatively, the Postal Service
suggests that under the proposed rule, it
could make a good-faith effort to make
appropriate adjustments to the report’s
format. Id.
The Postal Service states that the
Commission should exclude proposed
§ 3050.21(m), requiring Inbound Letter
Post revenue, volume, attributable cost,
and contribution data by UPU country
group and by shape. Id. at 7. The Postal
Service contends that the rule seeks
information that is ‘‘unrelated to the
Commission’s performance of its annual
compliance determination, would
encourage an incomplete and
misleading analysis of the financial
performance of [inbound letter post,24]
and create a risk of significant harm
from disclosure of commercially
sensitive data.’’ Id.
The Postal Service states that there is
no justification for separation of
information by UPU country group or by
shape for ACR purposes. Id. The Postal
Service states that the Commission’s
observations in previous ACR dockets
on Inbound Letter Post are
‘‘inapplicable to the current and future
financial performance of Inbound Letter
Post,’’ and do not justify the proposed
reporting requirements. Id. at 8. The
Postal Service states that the proposed
rule’s 5-year reporting period is
inappropriate because of the year-toyear changes in UPU country groups,
and the limited availability of shapebased data. Id. at 9.
The Postal Service also argues that the
information sought will not present all
revenue sources for inbound letter post.
Id. The Postal Service states that it
receives inbound letter post revenue
from a number of other sources,
including NSAs, supplemental UPU
remuneration for signature confirmation
24 The Postal Service appears to distinguish the
product, Inbound Letter Post, from a group of
related products comprising ‘‘inbound letter post.’’
For clarity, this Order capitalizes the name of the
product, and does not capitalize when referring to
the Postal Service’s group of related products.
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and tracking, PRIME multilateral
agreements, negotiated rates under
bilateral agreements, air conveyance
dues, and base terminal dues. Id. at 9–
10. The Postal Service argues that
proposed § 3050.21(m) relies only on
the MCS section 1130 Inbound Letter
Post revenue from base terminal dues
and air conveyance dues, without taking
into account these other sources of
revenue for inbound letter post. Id. at
10.
The Postal Service suggests revising
proposed § 3050.21(m) to include
inbound revenue and costs for other
MCS products including the Inbound
Registered Mail, the PRIME Expre´s
Service Agreement, the PRIME Tracked
Service Agreement, the Inbound Market
Dominant Multi-Service Agreements
with Foreign Postal Operators 1, and the
PRIME Registered Service Agreement.
Id. at 10–11.
Finally, the Postal Service suggests
that producing the Inbound Letter Post
information would put sensitive nonpublic material at risk. Id. at 11–12.
UPS Comments. UPS supports the
proposed modifications to reporting
deadlines, noting that the deadlines are
reasonable and should relieve the
reporting burden on the Postal Service,
ultimately allowing it to provide better
data. August 17 UPS Comments at 2.
Regarding changes to the Monthly
Summary Financial Report, UPS urges
the Commission to require the Postal
Service to produce two versions of the
affected tables for the next 12 months
(alternatively 6 months if 12 months
were found burdensome). Id. at 4. UPS
requests that the Commission confirm
that the only permitted departures from
the current de facto reporting format of
Table 2 are those described in Order No.
4607. Id. at 5. UPS states that any future
changes to the reporting format should
include a reproduction of past monthly
reports using new definitions, or the
production of both new and old
versions of the reports for a period. Id.
UPS supports all of the additional
requirements in the proposed rules. Id.
at 5–8. UPS asks the Commission to
clarify that the Postal Service should
report Inbound Letter Post information
according to proposed § 3050.21(m) in a
public filing or library reference. Id. at
8. UPS renews its request for the
Commission to consider requiring
segment-level reporting for competitive
products in order to promote
transparency. Id.
Public Representative Comments. The
Public Representative supports the
proposed changes to reporting
deadlines, and does not object to
changes to the format of the Monthly
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Summary Financial Report.25 She notes,
as the Postal Service does, that the input
for ‘‘Total Revenue’’ mentioned in Order
No. 4706 is not in the proposed
regulatory text. August 17 PR Comments
at 4. She also notes that the proposed
regulatory text replaces the input ‘‘Other
Expenses’’ with ‘‘Other Services’’
without explanation. Id.
Regarding proposed § 3050.21(f)(6),
and (j) through (m), the Public
Representative supports the
Commission’s efforts to improve and
streamline ACR dockets by requiring
certain reports be included in an initial
filing. See id. at 1. However, she
suggests that the Commission can
improve the proposed rules by using
clearer, consistent, and precise
terminology. Id. She provides line-byline revisions with suggested
terminology and minor reorganization.
Id. at 5–6; Attachment A.
The Public Representative proposes
that because both proposed § 3050.21(j)
and (k) apply to ‘‘all market dominant
and competitive products,’’ both
requirements are better nested as
subparagraphs, below a paragraph
stating that both requirements apply to
all market dominant and competitive
products. Id. at 2–3 (emphasis in
original). She notes, for example, that
the proposed rules unnecessarily
include the phrase ‘‘including all
negotiated service agreements’’ for
proposed paragraph (k) of this section,
but not for proposed paragraph (j) of this
section, despite both requirements being
applicable to NSAs. Id. at 2.
The Public Representative also
recommends clarifying proposed
§ 3050.21(m), which requires Inbound
Letter Post data for ‘‘the preceding five
fiscal years.’’ Id. at 3. She notes that, as
written, the rule appears to require data
for the five years preceding the year of
the ACR filing, without including the
year of the filing. Id. at 3–4 (emphasis
added). She also states that the
proposed rule was unclear as to whether
the rule requires the Postal Service to
provide data for each of the five years,
or the five years in aggregate. Id. at 4.
Therefore, she suggests changing the
language of the rule to require data ‘‘for
the fiscal year subject to review and
each of the preceding four fiscal years.’’
Id. at 4, 6.
The Public Representative includes a
list of line-by-line revisions to the
proposed rules, and a redlined version
of the regulatory text. Id. at 5–6;
Attachment A.
U.S. Chamber of Commerce
Comments. The U.S. Chamber of
B. Format of Monthly Summary
Financial Report
The proposed revisions to the
Monthly Summary Financial Report
utilize a definition of ‘‘operating
revenue’’ that is consistent with the
definition used for Form 10–K
reporting.26
While no commenter objects to the
format changes as proposed, UPS
requests that the Commission require
the Postal Service to either: (1)
Reproduce figures in past monthly
reports using the new proposed
definitions; or (2) produce monthly
reports using both the old and new
versions of the affected tables. August
17 UPS Comments at 3–4. UPS states
that without a device enabling direct
25 August 17 PR Comments at 1–2; March 7 PR
Comments at 5, 6 (incorporating prior comments).
26 United States Postal Service, 2017 Report on
Form 10–K, November 14, 2017, at 19.
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Commerce supports requiring the
reporting of Inbound Letter Post data.
The Chamber of Commerce suggests that
the Postal Service should provide public
data ‘‘so long as delivery rates for
inbound letter post are established by
intergovernmental agreement and not
equally available to domestic mailers
and private international carriers.’’
Chamber of Commerce Comments.
National Association of
Manufacturers Comments. NAM
supports requiring data on Inbound
Letter Post, stating that such data would
‘‘allow the Commission to draw
meaningful inferences from trends in
global postal traffic and to spot the
nature and severity of problems with
regard to net-losses incurred by the
[Postal Service].’’ NAM Comments at 1.
NAM suggests that the UPU terminal
dues system is ‘‘prime for abuse.’’ Id.
NAM states that there is a compelling
public interest in requiring the data and
that the burden on the Postal Service is
‘‘non-existent.’’ Id. NAM suggests that
the Commission require the Postal
Service to ‘‘disclose more granular and
useful data over time.’’ Id. at 1–2.
IV. Commission Analysis
A. Deadlines for Certain Periodic
Reports
No commenter objects to the proposed
deadlines for the filing of quarterly
RPW, QSR, and Billing Determinants
reports. Neither does any commenter
object to the proposed deadlines for the
Monthly Summary Financial Report or
the Trial Balance.
Accordingly, the Commission makes
no changes to the deadlines set forth at
proposed §§ 3050.25(c)–(e), and
3050.28(b), (c). The Commission adopts
those rules as set forth in Order No.
4706.
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comparison of reports completed under
the old format to reports completed
under the new format, ‘‘it will be
difficult for the Commission and
interested parties to compare certain
data across different time periods.’’ Id.
at 4. UPS argues that there is ‘‘negligible
burden on the Postal Service’’ in
producing the comparable data, and that
in the interest of transparency the
Commission should require its
production for 12 months. Id.
Alternatively, to the extent that the
Commission finds such production to be
too burdensome, UPS suggests that the
Commission require production of both
versions for only six months. Id.
In its reply comments, the Postal
Service avers that requiring parallel
reporting of the Monthly Summary
Financial Report, ‘‘would be
unwarranted given the modest nature of
the proposed changes.’’ Postal Service
Reply Comments at 5. The Postal
Service also noted that the Public
Representative identified alternative
sources of the data in the removed subinputs.27 UPS states that although
‘‘Government Appropriation’’ data are
available, it is unclear whether the
corresponding ‘‘Mail and Service
Revenue’’ data are available from other
sources. August 17 UPS Comments at 4.
The Commission finds that the
revised format, as proposed, will
improve the quality, accuracy, and
completeness of the Postal Service data
pursuant to 39 U.S.C. 3652(e)(2). While
the Commission recognizes the minimal
burden on the Postal Service in
producing duplicate tables under the
current format and under the new
format, it also finds that the proposal
represents only a modest format change,
and that the itemized data remain
available. The ‘‘Government
Appropriations’’ data, which refers to
amounts incurred in providing free and
reduced rate mail, are available in the
Monthly Trial Balance. The former
‘‘Mail Services Revenue’’ line input
represents the remainder of the new line
input ‘‘Operating Revenue’’ on Table 1
and ‘‘Total Operating Revenue’’ on
Table 2, and is now included in
‘‘Operating Revenue’’ combined with
the ‘‘Government Appropriations’’
amount. The Commission declines to
order that the Postal Service provide the
Tables of the Monthly Summary
Financial Report in both formats as the
change itself is minor, and the data are
available by other means.
Both the Postal Service and the Public
Representative note that the
Commission’s proposed rules do not
precisely match the explanations set
27 See
id. at 1–4; March 7 PR Comments at 6–7.
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forth in Order No. 4706. Postal Service
Comments at 3–4; August 17 PR
Comments at 4–5. Both the Postal
Service and Public Representative note
the omission of the line input for ‘‘Total
Revenue’’ in proposed § 3050.28(b)(1),
Table 1. Id.; August 17 PR Comments at
4–6.
The Public Representative also notes
that the proposed Table 1 also replaces
the existing line input for ‘‘Other
Expenses’’ with ‘‘Other Services.’’
August 17 PR Comments at 4. She also
notes a duplicative heading row in
proposed Table 1, and an underlined
heading, ‘‘Total Volume’’ in proposed
Table 2. Id. at 6.
The Postal Service notes that the line
input for ‘‘Net Operating Income’’ in
existing Table 1 appears to have
changed to ‘‘New Operating Income.’’
Postal Service Comments at 4. The
Postal Service suggests that the
Commission correct the change. Id.
The Commission acknowledges the
errors identified by the Postal Service
and the Public Representative, and
makes appropriate corrections in the
final rules.
C. Additional Requirements—Proposed
§ 3050.21(f)(6), (j)–(m)
1. Public Representative’s Clarification
Recommendations
The Public Representative identifies
that proposed § 3050.21(j) and (k) both
apply to all market dominant products.
August 17 PR Comments at 2–3. She
proposes revising paragraph (j) of this
section to include both requirements set
forth in proposed paragraphs (j) and (k)
of this section, with the requirements—
the distribution breakdown of fee
revenues and third-party performance
results and forfeited revenue—as
subparagraphs (1) and (2). Id.
The Public Representative suggests
revising the requirement in proposed
§ 3050.21(j) of ‘‘a distribution
breakdown of mail fees’’ with ‘‘a
distribution breakdown of fee revenues’’
stating that her suggestion is more
precise and inclusive of non-mail
products. Id. at 3.
The Public Representative suggests a
number of other changes, including
those reflecting her proposed
renumbering. Id. at 5–6. She suggests
hyphenating the word ‘‘noncompensatory’’ in paragraph (f)(6) of
this section. Id. at 5. She suggests
revising the 5-year reporting
requirement in paragraph (m) of this
section, replacing ‘‘the preceding five
fiscal years’’ with ‘‘for the fiscal year
subject to review and each of the
preceding four fiscal years.’’ Id. at 6.
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The Commission acknowledges that
the Public Representative’s suggested
revisions are a more concise and
effective alternative to achieving the
intent of the proposed rules. The
Commission finds that adopting the
minor changes creates more precise
requirements and will improve the
quality, accuracy, and completeness of
the Postal Service’s reporting.
Accordingly, the Commission adopts
the Public Representative’s suggested
reorganization and rewording in its final
rules.
2. Comments Regarding Proposed
§ 3050.21(m)
The U.S. Chamber of Commerce,
NAM, and UPS, each support proposed
§ 3050.21(m), requiring the Postal
Service to provide Inbound Letter Post
revenue, volume, attributable cost, and
contribution data by UPU country group
and shape.28 Those commenters note
the importance of transparency and
public access to Inbound Letter Post
data, and identify particular public
interest in the Inbound Letter Post
product.
The Postal Service opposes the
proposed reporting requirement, arguing
that information sought: (1) Is unrelated
to the Commission’s performance of its
annual compliance determination; (2)
would encourage incomplete and
misleading analysis of Inbound Letter
Post performance; and (3) would create
a risk of harm from disclosure of
commercially sensitive data of third
parties. Postal Service Comments at 7.
For the reasons set forth below, the
Commission declines to make any
additional modifications to proposed
§ 3050.21(m).
a. The Requirement Is Related to the
Commission’s ACD
The Postal Service suggests that the
Commission’s conclusions on the
Inbound Letter Post product are
‘‘inapplicable to the current and future
performance’’ of the product. Id. at 8.
The Postal Service also states that those
conclusions provide no justification for
the disaggregation of Inbound Letter
Post data by UPU country group and
shape. Id.
As noted in Order No. 4706, it is not
uncommon for the Commission to seek
enhanced information about products of
particular concern. For example, in the
FY 2017 ACD report, the Commission
chose to analyze Periodicals volume,
revenue, attributable cost, and
contribution, as well as unit revenue,
unit attributable cost, and unit
28 Chamber of Commerce Comments; NAM
Comments at 1–2; August 17 UPS Comments at 8.
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contribution for fiscal years 2007
through 2017.29 The Commission,
noting a year-after-year trend for the
Periodicals class, requested this
enhanced disaggregated data in order to
address ongoing issues with the class.
The past performance of the Periodicals
class, while not directly at issue in the
ACD, showed a trend of insufficient
Periodicals revenues to cover
attributable costs.
When the Commission determines the
noncompliance of a product, pursuant
to 39 U.S.C. 3653(c), it must order that
the Postal Service ‘‘take such action as
the Commission considers appropriate
in order to achieve compliance.’’ 39
U.S.C. 3662(c). Conducting a trend
analysis, as done for the Periodicals
class during the FY 2017 annual
compliance review, best allows the
Commission to determine the
appropriate remedial actions. Past
performance of the product, particularly
where it shows a trend of continued
failure to cover its attributable costs, is
relevant when determining the
appropriate corrective action in an ACD.
As noted in Order No. 4706, there is
a well-documented history of concern
about Inbound Letter Post’s ongoing
negative contribution, both in
Commission orders and in stakeholder
comments.30 Additionally, a recent
Presidential Memorandum directed the
29 Order No. 4706 at 17; Docket No. ACR2017,
Annual Compliance Determination Report, Fiscal
Year 2017, March 29, 2018, at 44–45 (FY 2017
ACD).
30 Order No. 4706 at 18 n.35. See Docket No.
IM2016–1, Congressional Letter to Secretary of State
Rex Tillerson and Postmaster General Megan
Brennan, November 8, 2017; Docket No. ACR2017,
Comments of James Smaldone, Founder & CEO,
Mighty Mug, Inc., January 25, 2018, at 1–2; Docket
No. ACR2017, Comments of National Association of
Manufacturers on Order No. 4377, January 24, 2018,
at 2; Docket No. ACR2017, Comments of United
Parcel Service, Inc. in Response to Notice of
Preliminary Determination to Unseal the Material
Filed in Response to Chairman’s Information
Request No. 1, Question 1, January 24, 2018, at 2–
3; Docket No. ACR2017, Comments of the
Honorable Kenny Marchant on Determination to
Unseal the Material Filed in Response to
Chairman’s Information Request No. 1, Question 1,
January 25, 2018, at 1–2; Docket No. ACR2017,
Comments of U.S. Chamber of Commerce, January
25, 2018, at 1–2; Docket No. ACR2017, Comments
of SBE Council Related to Inbound Letter Post,
February 20, 2018, at 1–2; Docket No. ACR2017,
Comments of United Parcel Service, Inc. in
Response to Notice of Preliminary Determination to
Unseal the Postal Service’s Response to Chairman’s
Information Request No. 15, February 23, 2018, at
3–4; Docket No. ACR2017, Reply Comments of
United Parcel Service, Inc. on United States Postal
Service Motion for Reconsideration of Order No.
4551, April 13, 2018, at 4; Docket No. ACR2017,
Comments of U.S. Chamber of Commerce, April 13,
2018, at 1; Docket No. IM2018–1, Comments
Received from U.S. Representatives Kenny
Marchant and Ralph Abraham, July 3, 2018, at 1;
Docket No. IM2018–1, Comment Received from
U.S. Senator Bill Cassidy, M.D., July 3, 2018, at 1.
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executive branch to seek reforms within
the UPU’s terminal dues system that
provides: (1) Fair and
nondiscriminatory terminal dues that
promote unrestricted and undistorted
competition; (2) terminal dues that
cover the costs of delivering Inbound
Letter Post mailpieces; (3) and terminal
dues that avoid favoring foreign mailers
over domestic mailers or favoring postal
operators over private sector entities.31
This Presidential Memorandum
highlights the Administration’s focus on
the Inbound Letter Post product.
Accordingly, the Commission finds that
providing enhanced data for the
purposes of conducting a trend analysis
across a period of years is appropriate,
particularly where the prices for a
product or products have routinely been
non-compensatory.
The Postal Service notes that a new
terminal dues system that charges
higher prices for bulky letters and small
packets than for letters and flats may
improve the Inbound Letter Post
product’s financial performance. Postal
Service Comments at 8. The Postal
Service avers that the past performance
of Inbound Letter Post under the former
terminal dues rate structure is not
relevant to the Commission ACD
dockets under a new rate structure. Id.
at 7–8.
The revenue, volume, attributable
cost, and contribution data—even for
past years under a different terminal
dues rate structure—are of significant
value in the Commission’s ACD. The
Commission’s analysis of these data
assists in identifying the cause or causes
of the product’s negative contribution. If
for example, under the new rate
structure, the product continues to
display similar trends, the Commission
might identify problems with the
product unrelated to price structure.
Price structure is not singularly
determinative of a product’s financial
performance. Other factors might
contribute to the product’s performance.
For example, in its trend analysis on the
Periodicals class, the Commission
identified declining productivity of mail
processing operations as a reason for the
negative trend. See FY 2017 ACD at 50.
The data required by proposed
§ 3050.21(m) will assist the
Commission’s efforts to identify the
31 See Presidential Memorandum for the
Secretary of State, Secretary of the Treasury,
Secretary of Homeland Security, Postmaster
General, and Chairman of the Postal Regulatory
Commission, August 23, 2018, available at: https://
www.whitehouse.gov/presidential-actions/
presidential-memorandum-secretary-statesecretary-treasury-secretary-homeland-securitypostmaster-general-chairman-postal-regulatorycommission/.
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challenges facing the product, and to
make appropriate recommendations.
The new rate structure has separate
rates for letters/flats and bulky letters/
small packets, which vary by UPU
country group.32 The Commission’s
ability to identify which rates account
for what portion of the product’s
contribution is critical to assessing how
to improve overall product cost
coverage. To the extent that a new price
structure does improve Inbound Letter
Post performance, such improvement
will be reflected in the data reporting,
and more easily attributed to the
changes in price structure, due to the
fuller picture provided by the enhanced
reporting.
Given the public interest and the
Commission’s recurring findings that
Inbound Letter Post revenue fails to
cover the product’s costs, the
Commission finds that it is necessary
and appropriate to require reporting at
this additional level of aggregation. The
Postal Service’s current reporting format
does not disaggregate by shape and UPU
country group so it is difficult to
determine what particular aspect or
aspects of the terminal dues system are
responsible for most of the negative
contribution. Providing this
disaggregated information will aid the
Commission in determining the
appropriate remedial action to
prescribe.
Furthermore, the legislative history
underlying the Postal Accountability
and Enhancement Act (PAEA) indicates
that enhanced transparency was a key
motivation in the enactment of the
PAEA.33 The Commission, consistent
with this goal, aims to be transparent in
its issuance of regulatory decisions and
encourages public participation in its
dockets.34 In fact, the PAEA requires the
Commission to consider whether the
public has access to ‘‘timely, adequate
information’’ when prescribing the
content and form of the ACR. 39 U.S.C.
3652(e)(1)(A). The additional Inbound
Letter Post data required under
proposed § 3050.21(m) will not only
improve the completeness of
information available to the
32 See Universal Postal Union, Decisions of the
2016 Istanbul Conference, Universal Postal
Convention, Final Protocol, Section VII, Article 29,
October 6, 2016.
33 Public Law 109–435, 120 Stat. 3198 (2006).
Both the committee report accompanying S. 2468,
the Senate’s 2004 postal reform bill, and the
committee report accompanying H.R. 22, the House
of Representatives’ 2005 postal reform bill, noted
that enhanced transparency and accountability
were essential aspects of postal reform. S. Rep. No.
108–318 at 5 (2004), H.R. Rep. No. 109–66, pt. 1 at
43 (2005).
34 See Postal Regulatory Commission, Guiding
Principles, Openness, available at: www.prc.gov/
mission.
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Commission for its determination, but
will also enhance public participation
by presenting more comprehensive and
understandable data for a product of
substantial public interest.
The Postal Service also states that the
proposed rule’s 5-year reporting period
is inappropriate because of the year-toyear changes in the composition of UPU
country groups, and that data
limitations may reduce the Postal
Service’s ability to produce shape-based
data for previous years. Postal Service
Comments at 9.
The Commission acknowledges that
changes to the composition of UPU
country groups create year-to-year
comparison challenges. However, the
Commission has experience in
analyzing changes within and among
products. For example, the Commission
has been able to account for previous
changes to the composition of UPU
country groups in previous ACDs.35
Thus, the Commission is prepared to
address these challenges. To the extent
that the Postal Service lacks a full 5-year
accounting of shape-based data, the
Commission notes that the Postal
Service is able to request the exclusion
or partial exclusion of that component
of the reporting requirement until such
time that shape-based data becomes
available for an entire 5-year period. See
39 CFR 3055.3(a).
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b. The Requirement Does Not Encourage
Incomplete or Misleading Analysis of
Inbound Letter Post Performance
The Postal Service states that
proposed § 3050.21(m), if implemented,
will ‘‘encourage the use of data that
support an incomplete and inaccurate
evaluation of the financial performance
of inbound letter post.’’ Postal Service
Comments at 9. The Postal Service’s
concern is that because proposed
§ 3050.21(m) requires reporting on the
Inbound Letter Post product 36 it will
not reflect the financial performance of
other products the Postal Service
classifies as ‘‘inbound letter post.’’ 37
35 See Docket No. ACR2016, Annual Compliance
Determination Report, Fiscal Year 2016, March 28,
2017, at 63–64.
36 MCS section 1130.
37 The Postal Service identifies these products as
MCS sections 1510.2.2 (International Ancillary
Services, Inbound International Registered Mail),
1602.5 (Negotiated Service Agreements,
International, Inbound Market Dominant Registered
Service Agreement 1), 1602.4 (Negotiated Service
Agreements, International, Inbound Market
Dominant Expre´s Service Agreement 1), 1602.6
(Negotiated Service Agreements, International,
Inbound Market Dominant PRIME Tracked Service
Agreement, 1602.3 (Negotiated Service Agreements,
International, Inbound Market Dominant MultiService Agreements with Foreign Postal Operators
1), July 15, 2018. Postal Service Comments at 10–
11.
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The Postal Service suggests that for an
accurate assessment of the financial
performance of ‘‘inbound letter post,’’
the Commission should consider
volume and supplemental revenue
derived from those other products. The
Postal Service proposes an alternative
reporting requirement for inbound
revenues and costs for MCS sections
1130, 1510.2, and 1602. Postal Service
Comments at 10–11. Notably, the Postal
Service’s proposal does not require that
the Postal Service report the alternative
data by UPU country group and shape.
See id.
The Commission finds the Postal
Service’s concerns about misleading
data unpersuasive. The Postal Service
made a similar argument during the FY
2017 ACD proceeding.38 In Docket No.
ACR2017, the Postal Service asserted
that the analysis for the Inbound Letter
Post product should include analysis of
‘‘the volume and revenue for
supplemental UPU remuneration for
signature confirmation and tracking on
registered items as well as for bilateral
market dominant NSAs and the PRIME
multilateral market dominant NSAs.’’
FY 2017 ACD at 66. The Postal Service
stated that the Public Representative’s
analysis of the Inbound Letter Post
product was incomplete because it was
limited to the volume and revenue for
the Inbound Letter Post product. Id. In
the FY 2017 ACD report, the
Commission rejected the Postal
Service’s suggested analysis and stated
that ‘‘[t]he Commission has consistently
evaluated compliance at the product
level because products, by definition,
reflect distinct cost or market
characteristics to which a rate or rates
are applied.’’ Id. at 67.
In each ACD, the Commission reviews
each product, including those identified
by the Postal Service as ‘‘inbound letter
post,’’ for cost coverage and compliance.
For example, in FY 2017, the
Commission found that ‘‘International
Ancillary Services did not cover its
attributable cost due to the failure of
International Registered Mail to cover
its attributable cost.’’ Id. at 71. The
Commission also reviewed Market
Dominant NSA products, finding that
Inbound Market Dominant MultiService Agreements with Foreign Postal
Operators 1, Inbound Market Dominant
Expre´s Service Agreement 1, and
Inbound Market Dominant Registered
Service Agreement 1 products satisfied
39 U.S.C. 3622(c)(10), while Inbound
Market Dominant PRIME Tracked
38 See Docket No. ACR2017, Reply Comments of
the United States Postal Service on Inbound Letter
Post, February 27, 2018.
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49291
Service Agreement product did not. Id.
at 74.
The Commission fulfills its mandate
to determine whether the rates or fees in
effect comply with 39 U.S.C. 3622 at the
product level. 39 U.S.C. 3653(b)(1). The
Postal Service provides no compelling
basis for the Commission to depart from
the reasonable practice of evaluating
compliance for each market dominant
international mail product at the
product level. The other products the
Postal Service classifies as ‘‘inbound
letter post’’ are in fact distinct products
from the Inbound Letter Post product,
and the performances of those products
speak for themselves. The Commission
reviews those products for compliance
transparently in its ACD. Because the
Commission makes a determination of
compliance for each of those products
individually, increased granularity will
not give rise to a misleading
representation of Inbound Letter Post
performance. In contrast, the Postal
Service’s suggestion would mask the
data by aggregating it with other
products’ data, which would be less
transparent and potentially misleading.
Accordingly, the Commission declines
to remove the proposed reporting
requirement for the Inbound Letter Post
product on the basis that the additional
data will be incomplete or misleading.
c. The Potential Risk of Commercial
Harm Resulting From Disclosing
Commercially Sensitive Data of Third
Parties is Outside the Scope of This
Rulemaking Proceeding
The Postal Service states that
requiring reporting of additional data by
UPU country group and shape would
put commercially sensitive third-party
information at risk of disclosure.39 The
Postal Service acknowledges it would
file the Inbound Letter Post data
required under proposed § 3050.21(m)
under seal, but suggests that a nonpublic filing would likely be challenged.
Id.
The Postal Service acknowledges that
the PAEA and the Commission rules
outline a procedure for application for
non-public treatment of information.
See id. To the extent that the Postal
Service believes that public disclosure
of Inbound Letter Post data separated by
UPU country group and shape would
39 Postal Service Comments at 11–12. The Postal
Service incorporates by reference its discussion in
Docket No. ACR2017. See Docket No. ACR2017,
United States Postal Service Motion for
Reconsideration of Order No. 4451, April 6, 2018;
Docket No. ACR2017, Response of the United States
Postal Service to Order No. 4409, February 23,
2018; Docket No. ACR2017, United States Postal
Service Notice of Filing Nonpublic Folder USPS–
FY17–NP40 and Application for Nonpublic
Treatment, February 14, 2018.
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cause a commercial harm, it could file
an application for non-public treatment
pursuant to §§ 3007.200 and 3007.201 of
this chapter. As noted in Order No.
4707, the application must particularly
identify ‘‘the nature and extent of the
harm alleged and the likelihood of each
harm.’’ 40 The Commission’s regulations
also outlines a procedure for
participants or the Commission to seek
to unseal material filed non-publicly by
the Postal Service. See 39 CFR 3007.103;
see also 39 CFR 3007.104. Accordingly,
the Commission will address the nonpublic status of data filed under
proposed § 3050.21(m), if and when the
Postal Service files the data under seal
and if the Commission issues a
preliminary determination concerning
the appropriate degree of protection, if
any, to be accorded to materials filed
under seal.
The Commission finds that rules
regarding non-public treatment of
commercially sensitive information are
sufficient in addressing the Postal
Service’s concerns. The Postal Service’s
assertion that a challenge to a nonpublic disclosure would put the
information ‘‘at risk’’ is not itself
enough reason to support removing the
proposed reporting requirement
altogether. Accordingly, the
Commission declines to remove
proposed § 3050.21(m) on the basis of
hypothetical risk to commercially
sensitive information.
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3. Concerns Regarding Proposed
§ 3050.21(j)
The Postal Service states that it
agrees, in theory, that including material
routinely requested in ACR proceedings
in the initial filing is likely to be more
efficient. Postal Service Comments at 4.
The Postal Service notes, however, that
for fee distribution data, the
Commission’s requests have sought the
information in different formats in each
of the past three years. Id. at 5. The
Postal Service correctly attributes these
format changes to continuing
adjustments to products lists. Id. The
Postal Service, anticipating that those
adjustments will continue going
forward, offers two suggestions for
determining the format of fee
distribution data. Id. at 6.
The Postal Service suggests that the
Commission might determine that it is
most efficient to continue the current
practice of using an information request
specifying the format for the fee
distribution data. Id. Such a
40 Docket No. ACR2017, Order Denying Motion
for Reconsideration of Order No. 4451 as Moot, July
12, 2018, at 15 (Order No. 4707); see 39 CFR
3007.201(b)(4).
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determination would obviate the need
to adopt proposed § 3050.21(j) as a final
rule. The Postal Service suggests that
alternatively, the Commission could
allow the Postal Service to make
reasonable updates to the format of the
report each year, pursuant to the
anticipated product adjustments. Id.
The Commission is satisfied with the
Postal Service’s proposal to make efforts
to make appropriate changes to the
format of fee distribution data based on
product adjustments. In its annual
submission, the Postal Service should
identify any such product adjustments
and corresponding format changes.
D. Removal of Unnecessary
Requirement in § 3050.60(c)
No commenter objects to the removal
of the requirement that the Postal
Service provide hard-copy updates of
publications and handbooks. The Postal
Service supports the modification. Id. at
3. Accordingly, the Commission does
not make any changes to proposed
§ 3050.60(c).
E. Other Comments—Segment-Level
Data
UPS requests that the Commission
reconsider its position on a proposal to
require segment-level reporting for
competitive products. August 17 UPS
Comments at 8. In Order No. 4706, the
Commission explained that it declined
to propose such requirements, because
the current single segment reporting is
adequate for determining compliance.
Order No. 4706 at 12–13. The PAEA
allows the Commission to consider the
adequacy of information provided in
determining the lawfulness of rates
charged, and can revise the reporting
requirements to ‘‘improve the quality,
accuracy, or completeness of Postal
Service data.’’ 39 U.S.C. 3652(e)(2). UPS
states that requiring segment-level
reporting ‘‘would promote transparency
and represent an improvement over the
status quo.’’ August 17 UPS Comments
at 8.
The Commission finds that UPS has
not shown that the current single-level
reporting practices are inaccurate or
inadequate. UPS must show that the
data, ‘‘ha[ve] become significantly
inaccurate or can be significantly
improved.’’ 39 U.S.C. 3652(e)(2)(A)
(emphasis added). The proposal for
segment-level reporting may be
appropriate for review in another docket
devoted toward the question. In the
instant docket, however, UPS has not
demonstrated the inadequacy in the
current reporting method or how it
would be significantly improved for
determining compliance. In fact, the
Commission finds that the current
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single-level reporting is sufficiently
accurate and adequate for the purposes
of assessing compliance. Accordingly,
the Commission declines to adopt rules
requiring segment-level reporting for
competitive products.
V. Changes to the Proposed Rules
The final rules incorporate many of
the commenters’ suggestions. The final
rules contain the correction of some
omissions from the proposed rules,
adjust the language of proposed rules,
and restructure and renumber proposed
rules. The substance of the rules
initially proposed in Order No. 4706
largely remains the same. Below, the
Commission describes the differences
between the proposed and final rules.
A. Section 3050.21
Proposed § 3050.21(f)(6) is revised to
hyphenate the word ‘‘noncompensatory’’ pursuant to the
suggestion of the Public Representative.
Also, because of the addition of
paragraph (f)(6) of this section, the word
‘‘and’’ at the end of paragraph (f)(4) of
this section is moved to the end of
paragraph (f)(5) of this section. The
Commission adopts this revision
pursuant to the Public Representative’s
suggestion.
Proposed § 3050.21(j) and (k) are
revised as paragraphs (j)(1) and (j)(2) of
this section. Paragraph (j) of this section
now reads ‘‘For all market dominant
and competitive products.’’ Proposed
paragraph (j) of this section, now
located at paragraph (j)(1) of this
section, required the distribution
breakdown of mail fees. The final rule
replaces ‘‘mail fees’’ with ‘‘fee
revenues’’ to more accurately reflect that
the requirement applies to some nonmail products. Proposed paragraph (k)
of this section, now located at paragraph
(j)(2) of this section required the Postal
Service to ‘‘provide . . . the amount of
any forfeited revenue.’’ Final
§ 3050.21(j)(2) revises the proposed rule,
now requiring that the Postal Service
‘‘identify’’ the amount of forfeited
revenue.
Because the final rules combine
proposed paragraphs (j) and (k) of this
section, the final rules require a minor
restructuring and renumbering.
Proposed paragraphs (l) through (n) of
this section are revised and renumbered
as paragraphs (k) through (m) of this
section, respectively.
The Commission also revises
proposed § 3050.21(m), renumbered to
§ 3050.21(l) in the final rules, pursuant
to the Public Representative’s
suggestion. The proposed rule required
Inbound Letter Post Date ‘‘for the
preceding five fiscal years.’’ Final
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§ 3050.21(l) more precisely defines this
requirement as ‘‘the fiscal year subject
to review and each of the preceding four
fiscal years.’’
Because of the renumbering, the
Commission also adopts a revision to
proposed § 3050.21(a), listing the
required content of the Postal Service’s
section 3652 report. The proposed rule
states that the report shall provide the
items listed in paragraphs (b) through
(n) of this section. Consistent with the
renumbering, the final rule states that
the report shall provide the items listed
in paragraphs (b) through (m) of this
section.
The Commission also revises the
amendatory instructions for the Federal
Register, consistent with the revisions
made to § 3050.21.
B. Section 3050.25
The Commission does not revise
§ 3050.25 as proposed in Order No.
4706.
D. Section 3050.60(c)
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List of Subjects in 39 CFR Part 3050
Administrative practice and
procedure, Reporting and recordkeeping
requirements.
For the reasons discussed in the
preamble, the Commission amends
Chapter III of title 39 of the Code of
Federal Regulations as follows:
1. The authority citation for part 3050
continues to read as follows:
■
In consideration of the comments of
the Postal Service and the Public
Representative, the Commission makes
several revision to proposed
§ 3050.28(b)(1), Table 1 and Table 2.
The final rules add the input ‘‘Total
Revenue’’ beneath the sub-inputs for
‘‘Operating Revenue’’ and ‘‘Other
Revenue’’ and above ‘‘Operating
Expenses’’ in Table 1. This revision is
consistent with the explanation of
changes in Order No. 4706. Pursuant to
the Postal Service’s suggestion, the
Commission revises the input ‘‘New
Operating Income’’ in proposed Table 1.
The final rules correct the input to ‘‘Net
Operating Income.’’ The final rules also
remove a duplicative heading row in
Table 1 and extraneous underlining
within certain cells in Table 2.
The Commission, pursuant to the
Public Representative’s suggestion,
revises the amendatory instructions
preceding final § 3050.28, to indicate
that the introductory language in
paragraph (b) of this section also
contains revisions. The content of the
introductory text of paragraph (b) of this
section remains unchanged from that
proposed in Order No. 4706.
The Commission does not revise
§ 3050.50(c) as proposed in Order No.
4706.
VI. Ordering Paragraphs
It is ordered:
1. Part 3050 of title 39, Code of
Federal Regulations, is revised as set
forth below the signature of this Order,
16:43 Sep 28, 2018
By the Commission.
Stacy L. Ruble,
Secretary.
PART 3050—PERIODIC REPORTING
C. Section 3050.28
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effective 30 days after publication in the
Federal Register.
2. The Postal Service shall make a
good-faith effort to make appropriate
adjustments to the format of the fee
distribution in each year’s Annual
Compliance Report, as necessary to
reflect product changes.
3. The Secretary shall arrange for
publication of this order in the Federal
Register.
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Authority: 39 U.S.C. 503, 3651, 3652, 3653.
2. Amend § 3050.21 by:
a. Revising paragraphs (a) and (f)(4)
and (5),
■ b. Adding paragraph (f)(6),
■ c. Revising paragraph (j), and
■ d. Adding paragraphs (k), (l), and (m).
The revisions and addtions read as
follows:
■
■
§ 3050.21 Content of the Postal Service’s
section 3652 report.
(a) No later than 90 days after the
close of each fiscal year, the Postal
Service shall submit a report to the
Commission analyzing its costs, volume,
revenue, rate, and service information in
sufficient detail to demonstrate that all
products during such year comply with
all applicable provisions of title 39 of
the United States Code. The report shall
provide the items in paragraphs (b)
through (m) of this section.
*
*
*
*
*
(f) * * *
(4) Analyze the contribution of the
agreement to institutional costs for its
most recent year of operation. The year
analyzed shall end on the anniversary of
the negotiated service agreement that
falls within the fiscal year covered by
the Postal Service’s annual periodic
reports to the Commission and include
the 12 preceding months. The analysis
shall show all calculations and fully
identify all inputs. Inputs used to
estimate the effect on total contribution
to the Postal Service, such as unit costs
and price elasticities, shall be updated
using fiscal year values;
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49293
(5) Analyze the effect of the
negotiated service agreement (and other
functionally equivalent negotiated
service agreements) on the marketplace.
If there were harmful effects, explain
why those effects were not
unreasonable; and
(6) Provide financial or other
supporting documentation that
demonstrates that non-compensatory
market dominant negotiated service
agreements improve the net financial
position of the Postal Service over
default rates or enhance the
performance of mail preparation,
processing, transportation, or other
functions.
*
*
*
*
*
(j) For all market dominant and
competitive products:
(1) Provide a distribution breakdown
of fee revenues, including all underlying
calculations and source workpapers;
and
(2) Provide any third-party service
performance results upon which any
financial penalty or bonus is
determined, and identify the amount of
any forfeited revenue;
(k) Provide all total workhour data
and data sources showing workhour
measurements by Labor Distribution
Code;
(l) For the Inbound Letter Post
product, provide revenue, volume,
attributable cost, and contribution data
by Universal Postal Union country
group and by shape for the preceding
the fiscal year subject to review and
each of the preceding four fiscal years;
and
(m) Provide any other information
that the Postal Service believes will help
the Commission evaluate the Postal
Service’s compliance with the
applicable provisions of title 39 of the
United States Code.
■ 3. Amend § 3050.25 by revising
paragraphs (c), (d), and (e) to read as
follows:
§ 3050.25
Volume and revenue data.
*
*
*
*
*
(c) Revenue, pieces, and weight by
rate category and special service by
quarter, within 40 days of the close of
Quarters 1, 2, and 3 of the fiscal year
and 60 days after Quarter 4, but no later
than the filing of reports filed pursuant
to section 3050.40(a) or 3050.40(b);
(d) Quarterly Statistics Report,
including estimates by shape, weight,
and indicia, within 40 days of the close
of Quarters 1, 2, and 3 of the fiscal year
and 60 days after Quarter 4 but no later
than the filing of reports filed pursuant
to section 3050.40(a) or 3050.40(b); and
(e) Billing determinants within 60
days of the close of Quarters 1, 2, and
E:\FR\FM\01OCR1.SGM
01OCR1
49294
Federal Register / Vol. 83, No. 190 / Monday, October 1, 2018 / Rules and Regulations
3 of the fiscal year and 90 days after
Quarter 4.
■ 4. Amend § 3050.28 by revising
paragraph (b) introductory text, tables 1
and 2 in paragraph (b)(1), and paragraph
(c) to read as follows:
§ 3050.28
Monthly and pay period reports.
*
*
*
*
*
(b) Monthly Summary Financial
Report on the 24th day of the following
month, except that the reports for the
last months of Quarters 1, 2, and 3 of the
fiscal year shall be provided at the time
that the Form 10–Q report is provided
and the report for the last month of
Quarter 4 of the fiscal year shall be
provided at the time that the Form 10–
K report is provided;
(1) * * *
TABLE 1—USPS MONTHLY FINANCIAL STATEMENT
MONTH, FISCAL YEAR
[$ millions]
Current Period
Actual
Plan
SPLY
Year-to-Date
% SPLY
Var
% Plan Var
Actual
Plan
SPLY
% Plan Var
% SPLY
Var
Revenue:
Operating Revenue
Other Revenue
Total Revenue
Operating Expenses
Personnel Compensation
and Benefits
Transportation
Supplies and Services
Other Services
Total Operating Expenses
Net Operating Income
Interest Income
Interest Expense
Total Net Income
Other Operating Statistics
Mail Volume (Millions)
Total Market Dominant
Volumes
Total Competitive
Product Volumes
Total Mail Volumes
Total Workhours (Millions)
Total Career Employees
Total Non-Career Employees
TABLE 2—MAIL VOLUME AND MAIL REVENUE
MONTH, FISCAL YEAR
[Thousands]
Current Period
amozie on DSK3GDR082PROD with RULES
Actual
SPLY
Year-to-Date
% SPLY Var
Actual
SPLY
Market Dominant Products:
First Class:
Volume
Revenue
Periodicals:
Volume
Revenue
USPS Marketing Mail:
Volume
Revenue
Package Services:
Volume
Revenue
All Other Market Dominant Mail:
Volume
Revenue
Total Market Dominant Products:
Volume
Revenue
Total Competitive Products
Volume
Revenue
Total Operating Revenue:
Total Volume
VerDate Sep<11>2014
16:43 Sep 28, 2018
Jkt 247001
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01OCR1
% SPLY Var
Federal Register / Vol. 83, No. 190 / Monday, October 1, 2018 / Rules and Regulations
*
*
*
*
*
(c) National Consolidated Trial
Balances and the Revenue and Expense
Summary on the 24th day of the
following month, except that the reports
for the last month of Quarters 1, 2, and
3 of the fiscal year shall be provided at
the time that the Form 10–Q report is
provided and the report for the last
month of Quarter 4 of the fiscal year
shall be provided at the time that the
Form 10–K report is provided;
*
*
*
*
*
■ 5. Amend § 3050.60 by revising
paragraph (c) to read as follows:
§ 3050.60 Miscellaneous reports and
documents.
*
*
*
*
*
(c) The items listed in paragraph (b)
of this section in electronic form;
*
*
*
*
*
[FR Doc. 2018–21249 Filed 9–28–18; 8:45 am]
BILLING CODE 7710–FW–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 9 and 721
[EPA–HQ–OPPT–2018–0567; FRL–9983–14]
RIN 2070–AB27
Significant New Use Rules on Certain
Chemical Substances
Correction
In rule document 2018–19950,
appearing on pages 47004 through
47025, in the issue of Monday,
September 17, 2018, make the following
correction:
§ 9.1, §§ 721.11124–11125, §§ 721.11130–
11140 [Corrected]
In the regulatory text for Part 9 and
Part 721, beginning on page 47017,
remove ‘‘14;’’ and where it appears after
the section mark symbol (§ ) in
amendatory paragraph instructions 2, 4,
5, and 10–20.
■
[FR Doc. C1–2018–19950 Filed 9–28–18; 8:45 am]
BILLING CODE 1301–00–D
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
amozie on DSK3GDR082PROD with RULES
[EPA–R01–OAR–2018–0138; FRL–9984–
61—Region 1]
Air Plan Approval; Maine;
Infrastructure State Implementation
Plan Requirements for the 2012 PM2.5
NAAQS
Environmental Protection
Agency (EPA).
AGENCY:
VerDate Sep<11>2014
16:43 Sep 28, 2018
Jkt 247001
ACTION:
IV. Statutory and Executive Order Reviews
Final rule.
The Environmental Protection
Agency (EPA) is approving a State
Implementation Plan (SIP) revision
submitted by the State of Maine. This
revision addresses the infrastructure
requirements of the Clean Air Act (CAA
or Act) for the 2012 fine particle (PM2.5)
National Ambient Air Quality Standards
(NAAQS). EPA is conditionally
approving the SIP revision for
infrastructure requirements related to
State Boards and Conflicts of Interest.
The intended effect of this action is to
approve the infrastructure requirements
of Maine’s air quality management
program with respect to this NAAQS
into the Maine SIP. This action is being
taken in accordance with the Clean Air
Act.
DATES: This rule is effective on October
31, 2018.
ADDRESSES: EPA has established a
docket for this action under Docket
Identification No. EPA–R01–OAR–
2018–0138. All documents in the docket
are listed on the https://
www.regulations.gov website. Although
listed in the index, some information is
not publicly available, i.e., CBI or other
information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
is not placed on the internet and will be
publicly available only in hard copy
form. Publicly available docket
materials are available at https://
www.regulations.gov or at the U.S.
Environmental Protection Agency, EPA
Region 1 Regional Office, Office of
Ecosystem Protection, Air Quality
Planning Unit, 5 Post Office Square—
Suite 100, Boston, MA. EPA requests
that if at all possible, you contact the
contact listed in the FOR FURTHER
INFORMATION CONTACT section to
schedule your inspection. The Regional
Office’s official hours of business are
Monday through Friday, 8:30 a.m. to
4:30 p.m., excluding legal holidays.
FOR FURTHER INFORMATION CONTACT:
Alison C. Simcox, Air Quality Planning
Unit, U.S. Environmental Protection
Agency, EPA Region 1, 5 Post Office
Square, Suite 100 (Mail code: OEP05–2),
Boston, MA 02109–3912, telephone
number: (617) 918–1684, email:
simcox.alison@epa.gov.
SUPPLEMENTARY INFORMATION:
Throughout this document whenever
‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean
EPA.
SUMMARY:
Table of Contents
I. Background and Purpose
II. Response to Comments
III. Final Action
PO 00000
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49295
Sfmt 4700
I. Background and Purpose
Under sections 110(a)(1) and (2) of the
CAA, states are required to submit
infrastructure SIPs to ensure that SIPs
provide for implementation,
maintenance, and enforcement of the
NAAQS, including the 2012 PM2.5
NAAQS. On July 6, 2016, Maine
submitted an infrastructure SIP revision
for the 2012 PM2.5 NAAQS, including an
enclosure to address the ‘‘Good
Neighbor’’ (or ‘‘transport’’) provisions of
the Act. See CAA section
110(a)(2)(D)(i)(I). On August 13, 2018
(83 FR 39957), EPA published a Notice
of Proposed Rulemaking (NPRM), in
which EPA proposed full approval of all
elements of Maine’s infrastructure SIP
revision for the 2012 PM2.5 NAAQS,
except for requirements regarding State
Boards and Conflicts of Interest, which
we proposed to conditionally approve.
The NPRM includes the rationale for
approval, and EPA will not restate it
here.
This rulemaking does not cover three
substantive areas that are not integral to
acting on a state’s infrastructure SIP
submission: (i) Existing provisions
related to excess emissions during
periods of start-up, shutdown, or
malfunction (SSM) at sources that may
be contrary to the CAA and EPA’s
policies addressing such excess
emissions; (ii) existing provisions
related to ‘‘director’s variance’’ or
‘‘director’s discretion’’ that purport to
permit revisions to SIP-approved
emissions limits with limited public
process or without requiring further
approval by EPA, that may be contrary
to the CAA; and, (iii) existing provisions
for Prevention of Significant
Deterioration (PSD) programs that may
be inconsistent with current
requirements of EPA’s ‘‘Final New
Source Review (NSR) Improvement
Rule,’’ 67 FR 80186 (December 31,
2002), as amended by 72 FR 32526 (June
13, 2007). Instead, EPA has the
authority to address each of these
substantive areas separately. A detailed
history, interpretation, and rationale for
EPA’s approach to infrastructure SIP
requirements can be found in EPA’s
May 13, 2014, proposed rule entitled,
‘‘Infrastructure SIP Requirements for the
2008 Lead NAAQS’’ in the section,
‘‘What is the scope of this rulemaking?’’
See 79 FR 27241 at 27242–45.
II. Response to Comments
During the comment period, EPA
received one comment, which discusses
subjects outside the scope of this SIP
action, does not explain (or provide a
legal basis for) how the proposed action
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01OCR1
]]>Agencies
[Federal Register Volume 83, Number 190 (Monday, October 1, 2018)]
[Rules and Regulations]
[Pages 49286-49295]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21249]
=======================================================================
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
39 CFR Part 3050
[Docket No. RM2018-2; Order No. 4836]
Periodic Reporting Requirements
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission adopts final rules revising periodic reporting
requirements codified in our regulations. The final rules amend several
existing sections of our regulations, and add several subsections to
our regulations.
DATES: Effective: October 31, 2018.
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
Regulatory History
83 FR 33879 (Jul. 18, 2018)
83 FR 1320 (Jan. 11, 2018)
Table of Contents
I. Introduction
II. Background
III. Comments
IV. Commission Analysis
V. Changes to the Proposed Rules
VI. Ordering Paragraphs
I. Introduction
In this Order, the Commission adopts final rules revising periodic
reporting requirements codified in 39 CFR part 3050. The final rules
adopted by this Order amend existing rules by adjusting the deadlines
of certain quarterly and monthly reports, modifying the format of the
Monthly Summary Financial Report, and adding or removing certain
reporting requirements. The final rules amend several existing sections
of 39 CFR part 3050, and add several subsections to Sec. 3050.21.
II. Background
On December 27, 2017, the Postal Service requested that the
Commission initiate a rulemaking proceeding to consider revisions to
the periodic reporting requirements codified in 39 CFR part 3050.\1\ On
January 5, 2018, the Commission established this docket and invited
comments and reply comments regarding the Postal Service's proposed
revisions.\2\ The Commission received comments from the Public
Representative \3\ and the United Parcel Service, Inc. (UPS).\4\ The
Commission received reply comments from the Postal Service \5\ and the
Parcel Shippers Association (PSA).\6\
---------------------------------------------------------------------------
\1\ United States Postal Service Petition for Rulemaking on
Periodic Reporting, December 27, 2017 (Petition).
\2\ Advance Notice of Proposed Rulemaking to Revise Periodic
Reporting Requirements, January 5, 2018 (Order No. 4374). The
Advance Notice of Proposed Rulemaking to Revise Periodic Reporting
Requirements was published in the Federal Register on January 11,
2018. See 83 FR 1320 (January 11, 2018).
\3\ Public Representative Comments on Advance Notice of Proposed
Rulemaking to Revise Periodic Reporting Requirements, March 7, 2018
(March 7 PR Comments).
\4\ Comments of United Parcel Service, Inc. on Advance Notice of
Proposed Rulemaking to Revise Periodic Reporting Requirements, March
7, 2018 (March 7 UPS Comments).
\5\ Reply Comments of the United States Postal Service, April 6,
2018 (Postal Service Reply Comments).
\6\ Reply Comments of the Parcel Shippers Association (PSA),
April 6, 2018.
---------------------------------------------------------------------------
The Postal Service's petition contained three requests. First, the
Postal Service requested that the Commission adjust deadlines for the
quarterly Revenue, Pieces, and Weight (RPW) report; the Quarterly
Statistics Report (QSR); the quarterly Billing Determinants report; and
the monthly National Consolidated Trial Balance and Revenue and Expense
Summary (Trial Balance) report to align the deadlines with other
financial reporting deadlines. Petition at 1. The Postal Service stated
that aligning the deadlines would be more effective, as the current
rules require the reports to be submitted before key information is
available. Id. at 3-5.
Second, the Postal Service requested that the Commission change the
format of the Monthly Summary Financial Report. Id. at 6. The Postal
Service sought to revise Sec. 3050.28(b)(1), Table 1 and Table 2. For
Table 1, the Postal Service requested a change of the term ``Operating
Revenue'' to ``Revenue,'' and to remove a breakdown of types of
operating revenue. Id. at 6-8. For Table 2, the Postal Service
requested to update the product name for USPS Marketing Mail, as the
previous format used the old product name of Standard Mail. Id. at 8.
Third, the Postal Service requested that the Commission remove any
requirements deemed unnecessary to the Commission's evaluation of
compliance with title 39. Id. at 9-10.
The Commission considered the comments it received in response to
Order No. 4706 and reviewed its periodic reporting rules to determine
if updates were warranted, and as a result proposed revisions to the
rules.\7\ The revisions incorporated the Postal Service's proposal to
adjust the filing date for the RPW, QSR, Billing Determinants, and
Trial Balance reports.\8\
---------------------------------------------------------------------------
\7\ Notice of Proposed Rulemaking to Revise the Periodic
Reporting Requirements, July 12, 2018 (Order No. 4706). The Notice
of Proposed Rulemaking to Revise the Periodic Reporting Requirements
was published in the Federal Register on July 18, 2018. See 83 FR
33879 (July 18, 2018).
\8\ See Order No. 4706 at 8-10, part IV.B, proposed sections
3050.25(c)-(e), 3050.28(c).
---------------------------------------------------------------------------
The proposed rules also changed the format of the Monthly Summary
Financial Report. In Sec. 3050.28(b)(1), Table 1, the existing input
for ``Operating Revenue'' remains, but component inputs ``Mail and
Services Revenue'' and ``Government Appropriations'' were removed. A
new heading, ``Revenue,'' contains an input for ``Operating Revenue,''
a new input for ``Other Revenue,'' and an input for their combined
``Total Revenue.'' \9\
[[Page 49287]]
Proposed changes to Table 2 included a replacement of the current input
``Standard Mail'' to ``USPS Marketing Mail,'' and the replacement of
the ``Total All Mail'' input and its components with distinct inputs
for ``Total Volume'' and ``Total Operating Revenue.'' \10\
---------------------------------------------------------------------------
\9\ Id. at 10-11, part IV.C. Although Order No. 4706 explained
this change, the proposed Table 1 inadvertently failed to reflect
the change, omitting the new ``Total Revenue'' input.
\10\ Id. at 12, proposed section 3050.28(b)(1), Table 2.
---------------------------------------------------------------------------
In Order No. 4706, the Commission also explained several
modifications to the existing rules that the Commission deemed
necessary to increase the efficiency and decrease the administrative
burden, for both the Postal Service and the Commission, of the Annual
Compliance Determination (ACD) process. Id. at 13. The proposed rules
added a requirement that the Postal Service file documentation with its
Annual Compliance Report (ACR) showing that non-compensatory market
dominant negotiated service agreements (NSAs) improve the Postal
Service's net financial position or enhance the performance of mail
preparation, processing, transportation, or other functions.\11\
---------------------------------------------------------------------------
\11\ Id. at 13-14, proposed Sec. 3050.21(f)(6).
---------------------------------------------------------------------------
Proposed Sec. 3050.21(j) replaced the existing section requiring
the Postal Service to provide any information it believes will assist
the Commission in evaluating compliance with title 39. The Commission's
proposed rules renumbered that requirement as Sec. 3050.21(n), and
revised Sec. 3050.21(j) to require that the Postal Service provide a
distribution breakdown of mail fees for market dominant and competitive
products.\12\
---------------------------------------------------------------------------
\12\ Id. at 14, proposed Sec. 3050.21(j).
---------------------------------------------------------------------------
Proposed Sec. 3050.21(k) added a requirement that the Postal
Service provide in its annual filing any third-party service
performance results where a financial penalty or bonus is applied, and
to provide the amount of any forfeited revenue.\13\
---------------------------------------------------------------------------
\13\ Id. at 15, proposed Sec. 3050.21(k).
---------------------------------------------------------------------------
Proposed Sec. 3050.21(l) added a requirement that the Postal
Service provide all total workhour data and data sources, showing
workhour measurements by Labor Distribution Code.\14\
---------------------------------------------------------------------------
\14\ Id. at 15-16, proposed Sec. 3050.21(l).
---------------------------------------------------------------------------
In proposed Sec. 3050.21(m), the Commission added a requirement
that the Postal Service provide with its ACR Inbound Letter Post \15\
revenue, volume, attributable cost, and contribution data aggregated by
Universal Postal Union (UPU) country group and by shape for the
preceding five fiscal years.\16\
---------------------------------------------------------------------------
\15\ ``Inbound Letter Post'' as defined in the Mail
Classification Schedule (MCS) section 1130.
\16\ Id. at 16-18, proposed Sec. 3050.21(m).
---------------------------------------------------------------------------
The Commission's proposed rules also removed a requirement from
Sec. 3050.60. Id. at 19. The current Sec. 3050.60(c) requires the
Postal Service to provide hard and electronic copies of any
publications or handbooks, data collection forms, and training
handbooks whenever they are changed. The Commission, finding that
providing a hard-copy form might create unnecessary administrative
effort, proposed to remove the requirement of providing those
publications in hard-copy form.\17\
---------------------------------------------------------------------------
\17\ Id. at 19, proposed Sec. 3050.60(c).
---------------------------------------------------------------------------
In Order No. 4706, the Commission invited comments on the proposal
from interested parties. Id.
III. Comments
In response to Order No. 4706, the Commission received comments
from the Postal Service,\18\ UPS,\19\ the Public Representative,\20\
the U.S. Chamber of Commerce,\21\ and the National Association of
Manufacturers (NAM).\22\
---------------------------------------------------------------------------
\18\ United States Postal Service Comments Regarding Order No.
4706, August 17, 2018 (Postal Service Comments).
\19\ Comments of United Parcel Service, Inc. on Notice of
Proposed Rulemaking to Revise the Periodic Reporting Requirements,
August 17, 2018 (August 17 UPS Comments).
\20\ Public Representative Comments on Notice of Proposed
Rulemaking to Revise Periodic Reporting Requirements, August 17,
2018 (August 17 PR Comments).
\21\ Comments of the U.S. Chamber of Commerce, August 17, 2018
(Chamber of Commerce Comments).
\22\ Comments of National Association of Manufacturers, August
17, 2018 (NAM Comments).
---------------------------------------------------------------------------
Postal Service Comments. The Postal Service supports the proposed
rules regarding deadlines for periodic reports, the format of the
Monthly Summary Financial Report, and the removal of the requirement
that the Postal Service produce hard copies of updated publications or
handbooks.\23\
---------------------------------------------------------------------------
\23\ Postal Service Comments at 3-4. The Postal Service
identifies two minor issues with proposed Sec. 3050.28(b)(1), Table
1. In Order No. 4706, the Commission indicated it would include an
input for ``Total Revenue'' but the input is not in the proposed
Table 1. Also, existing input ``Net Operating Income'' appears as
``New Operating Income'' in the proposed Table 1. The Postal Service
recommends correcting Table 1 consistent with the explanation in
Order No. 4706. Id. at 4.
---------------------------------------------------------------------------
The Postal Service agrees in theory that including in the initial
ACR filing certain information it routinely provides in response to
information requests would improve efficiency. Id. at 4. The Postal
Service notes that for information regarding non-compensatory bilateral
agreements, international product third-party service performance, and
total workhour and related data by Labor Distribution Code, the Postal
Service has provided the reports as additional components of existing
ACR folders. Id. at 4-5. However, for fee distribution information
required by proposed Sec. 3050.21(j), the Postal Service notes that in
Docket Nos. ACR2015, ACR2016, and ACR2017, the format of the
information varied. Id. at 5. The Postal Service states that the format
varied due to foreseeable changes in circumstances, including new
products, new product names, price adjustments, and transfers. Id. The
Postal Service suggests that if the Commission desires to specify the
format for fee distribution report each year, the existing Chairman's
Information Request procedure would be most appropriate. Id. at 6.
Alternatively, the Postal Service suggests that under the proposed
rule, it could make a good-faith effort to make appropriate adjustments
to the report's format. Id.
The Postal Service states that the Commission should exclude
proposed Sec. 3050.21(m), requiring Inbound Letter Post revenue,
volume, attributable cost, and contribution data by UPU country group
and by shape. Id. at 7. The Postal Service contends that the rule seeks
information that is ``unrelated to the Commission's performance of its
annual compliance determination, would encourage an incomplete and
misleading analysis of the financial performance of [inbound letter
post,\24\] and create a risk of significant harm from disclosure of
commercially sensitive data.'' Id.
---------------------------------------------------------------------------
\24\ The Postal Service appears to distinguish the product,
Inbound Letter Post, from a group of related products comprising
``inbound letter post.'' For clarity, this Order capitalizes the
name of the product, and does not capitalize when referring to the
Postal Service's group of related products.
---------------------------------------------------------------------------
The Postal Service states that there is no justification for
separation of information by UPU country group or by shape for ACR
purposes. Id. The Postal Service states that the Commission's
observations in previous ACR dockets on Inbound Letter Post are
``inapplicable to the current and future financial performance of
Inbound Letter Post,'' and do not justify the proposed reporting
requirements. Id. at 8. The Postal Service states that the proposed
rule's 5-year reporting period is inappropriate because of the year-to-
year changes in UPU country groups, and the limited availability of
shape-based data. Id. at 9.
The Postal Service also argues that the information sought will not
present all revenue sources for inbound letter post. Id. The Postal
Service states that it receives inbound letter post revenue from a
number of other sources, including NSAs, supplemental UPU remuneration
for signature confirmation
[[Page 49288]]
and tracking, PRIME multilateral agreements, negotiated rates under
bilateral agreements, air conveyance dues, and base terminal dues. Id.
at 9-10. The Postal Service argues that proposed Sec. 3050.21(m)
relies only on the MCS section 1130 Inbound Letter Post revenue from
base terminal dues and air conveyance dues, without taking into account
these other sources of revenue for inbound letter post. Id. at 10.
The Postal Service suggests revising proposed Sec. 3050.21(m) to
include inbound revenue and costs for other MCS products including the
Inbound Registered Mail, the PRIME Expr[eacute]s Service Agreement, the
PRIME Tracked Service Agreement, the Inbound Market Dominant Multi-
Service Agreements with Foreign Postal Operators 1, and the PRIME
Registered Service Agreement. Id. at 10-11.
Finally, the Postal Service suggests that producing the Inbound
Letter Post information would put sensitive non-public material at
risk. Id. at 11-12.
UPS Comments. UPS supports the proposed modifications to reporting
deadlines, noting that the deadlines are reasonable and should relieve
the reporting burden on the Postal Service, ultimately allowing it to
provide better data. August 17 UPS Comments at 2.
Regarding changes to the Monthly Summary Financial Report, UPS
urges the Commission to require the Postal Service to produce two
versions of the affected tables for the next 12 months (alternatively 6
months if 12 months were found burdensome). Id. at 4. UPS requests that
the Commission confirm that the only permitted departures from the
current de facto reporting format of Table 2 are those described in
Order No. 4607. Id. at 5. UPS states that any future changes to the
reporting format should include a reproduction of past monthly reports
using new definitions, or the production of both new and old versions
of the reports for a period. Id.
UPS supports all of the additional requirements in the proposed
rules. Id. at 5-8. UPS asks the Commission to clarify that the Postal
Service should report Inbound Letter Post information according to
proposed Sec. 3050.21(m) in a public filing or library reference. Id.
at 8. UPS renews its request for the Commission to consider requiring
segment-level reporting for competitive products in order to promote
transparency. Id.
Public Representative Comments. The Public Representative supports
the proposed changes to reporting deadlines, and does not object to
changes to the format of the Monthly Summary Financial Report.\25\ She
notes, as the Postal Service does, that the input for ``Total Revenue''
mentioned in Order No. 4706 is not in the proposed regulatory text.
August 17 PR Comments at 4. She also notes that the proposed regulatory
text replaces the input ``Other Expenses'' with ``Other Services''
without explanation. Id.
---------------------------------------------------------------------------
\25\ August 17 PR Comments at 1-2; March 7 PR Comments at 5, 6
(incorporating prior comments).
---------------------------------------------------------------------------
Regarding proposed Sec. 3050.21(f)(6), and (j) through (m), the
Public Representative supports the Commission's efforts to improve and
streamline ACR dockets by requiring certain reports be included in an
initial filing. See id. at 1. However, she suggests that the Commission
can improve the proposed rules by using clearer, consistent, and
precise terminology. Id. She provides line-by-line revisions with
suggested terminology and minor reorganization. Id. at 5-6; Attachment
A.
The Public Representative proposes that because both proposed Sec.
3050.21(j) and (k) apply to ``all market dominant and competitive
products,'' both requirements are better nested as subparagraphs, below
a paragraph stating that both requirements apply to all market dominant
and competitive products. Id. at 2-3 (emphasis in original). She notes,
for example, that the proposed rules unnecessarily include the phrase
``including all negotiated service agreements'' for proposed paragraph
(k) of this section, but not for proposed paragraph (j) of this
section, despite both requirements being applicable to NSAs. Id. at 2.
The Public Representative also recommends clarifying proposed Sec.
3050.21(m), which requires Inbound Letter Post data for ``the preceding
five fiscal years.'' Id. at 3. She notes that, as written, the rule
appears to require data for the five years preceding the year of the
ACR filing, without including the year of the filing. Id. at 3-4
(emphasis added). She also states that the proposed rule was unclear as
to whether the rule requires the Postal Service to provide data for
each of the five years, or the five years in aggregate. Id. at 4.
Therefore, she suggests changing the language of the rule to require
data ``for the fiscal year subject to review and each of the preceding
four fiscal years.'' Id. at 4, 6.
The Public Representative includes a list of line-by-line revisions
to the proposed rules, and a redlined version of the regulatory text.
Id. at 5-6; Attachment A.
U.S. Chamber of Commerce Comments. The U.S. Chamber of Commerce
supports requiring the reporting of Inbound Letter Post data. The
Chamber of Commerce suggests that the Postal Service should provide
public data ``so long as delivery rates for inbound letter post are
established by intergovernmental agreement and not equally available to
domestic mailers and private international carriers.'' Chamber of
Commerce Comments.
National Association of Manufacturers Comments. NAM supports
requiring data on Inbound Letter Post, stating that such data would
``allow the Commission to draw meaningful inferences from trends in
global postal traffic and to spot the nature and severity of problems
with regard to net-losses incurred by the [Postal Service].'' NAM
Comments at 1. NAM suggests that the UPU terminal dues system is
``prime for abuse.'' Id. NAM states that there is a compelling public
interest in requiring the data and that the burden on the Postal
Service is ``non-existent.'' Id. NAM suggests that the Commission
require the Postal Service to ``disclose more granular and useful data
over time.'' Id. at 1-2.
IV. Commission Analysis
A. Deadlines for Certain Periodic Reports
No commenter objects to the proposed deadlines for the filing of
quarterly RPW, QSR, and Billing Determinants reports. Neither does any
commenter object to the proposed deadlines for the Monthly Summary
Financial Report or the Trial Balance.
Accordingly, the Commission makes no changes to the deadlines set
forth at proposed Sec. Sec. 3050.25(c)-(e), and 3050.28(b), (c). The
Commission adopts those rules as set forth in Order No. 4706.
B. Format of Monthly Summary Financial Report
The proposed revisions to the Monthly Summary Financial Report
utilize a definition of ``operating revenue'' that is consistent with
the definition used for Form 10-K reporting.\26\
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\26\ United States Postal Service, 2017 Report on Form 10-K,
November 14, 2017, at 19.
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While no commenter objects to the format changes as proposed, UPS
requests that the Commission require the Postal Service to either: (1)
Reproduce figures in past monthly reports using the new proposed
definitions; or (2) produce monthly reports using both the old and new
versions of the affected tables. August 17 UPS Comments at 3-4. UPS
states that without a device enabling direct
[[Page 49289]]
comparison of reports completed under the old format to reports
completed under the new format, ``it will be difficult for the
Commission and interested parties to compare certain data across
different time periods.'' Id. at 4. UPS argues that there is
``negligible burden on the Postal Service'' in producing the comparable
data, and that in the interest of transparency the Commission should
require its production for 12 months. Id. Alternatively, to the extent
that the Commission finds such production to be too burdensome, UPS
suggests that the Commission require production of both versions for
only six months. Id.
In its reply comments, the Postal Service avers that requiring
parallel reporting of the Monthly Summary Financial Report, ``would be
unwarranted given the modest nature of the proposed changes.'' Postal
Service Reply Comments at 5. The Postal Service also noted that the
Public Representative identified alternative sources of the data in the
removed sub-inputs.\27\ UPS states that although ``Government
Appropriation'' data are available, it is unclear whether the
corresponding ``Mail and Service Revenue'' data are available from
other sources. August 17 UPS Comments at 4.
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\27\ See id. at 1-4; March 7 PR Comments at 6-7.
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The Commission finds that the revised format, as proposed, will
improve the quality, accuracy, and completeness of the Postal Service
data pursuant to 39 U.S.C. 3652(e)(2). While the Commission recognizes
the minimal burden on the Postal Service in producing duplicate tables
under the current format and under the new format, it also finds that
the proposal represents only a modest format change, and that the
itemized data remain available. The ``Government Appropriations'' data,
which refers to amounts incurred in providing free and reduced rate
mail, are available in the Monthly Trial Balance. The former ``Mail
Services Revenue'' line input represents the remainder of the new line
input ``Operating Revenue'' on Table 1 and ``Total Operating Revenue''
on Table 2, and is now included in ``Operating Revenue'' combined with
the ``Government Appropriations'' amount. The Commission declines to
order that the Postal Service provide the Tables of the Monthly Summary
Financial Report in both formats as the change itself is minor, and the
data are available by other means.
Both the Postal Service and the Public Representative note that the
Commission's proposed rules do not precisely match the explanations set
forth in Order No. 4706. Postal Service Comments at 3-4; August 17 PR
Comments at 4-5. Both the Postal Service and Public Representative note
the omission of the line input for ``Total Revenue'' in proposed Sec.
3050.28(b)(1), Table 1. Id.; August 17 PR Comments at 4-6.
The Public Representative also notes that the proposed Table 1 also
replaces the existing line input for ``Other Expenses'' with ``Other
Services.'' August 17 PR Comments at 4. She also notes a duplicative
heading row in proposed Table 1, and an underlined heading, ``Total
Volume'' in proposed Table 2. Id. at 6.
The Postal Service notes that the line input for ``Net Operating
Income'' in existing Table 1 appears to have changed to ``New Operating
Income.'' Postal Service Comments at 4. The Postal Service suggests
that the Commission correct the change. Id.
The Commission acknowledges the errors identified by the Postal
Service and the Public Representative, and makes appropriate
corrections in the final rules.
C. Additional Requirements--Proposed Sec. 3050.21(f)(6), (j)-(m)
1. Public Representative's Clarification Recommendations
The Public Representative identifies that proposed Sec. 3050.21(j)
and (k) both apply to all market dominant products. August 17 PR
Comments at 2-3. She proposes revising paragraph (j) of this section to
include both requirements set forth in proposed paragraphs (j) and (k)
of this section, with the requirements--the distribution breakdown of
fee revenues and third-party performance results and forfeited
revenue--as subparagraphs (1) and (2). Id.
The Public Representative suggests revising the requirement in
proposed Sec. 3050.21(j) of ``a distribution breakdown of mail fees''
with ``a distribution breakdown of fee revenues'' stating that her
suggestion is more precise and inclusive of non-mail products. Id. at
3.
The Public Representative suggests a number of other changes,
including those reflecting her proposed renumbering. Id. at 5-6. She
suggests hyphenating the word ``non-compensatory'' in paragraph (f)(6)
of this section. Id. at 5. She suggests revising the 5-year reporting
requirement in paragraph (m) of this section, replacing ``the preceding
five fiscal years'' with ``for the fiscal year subject to review and
each of the preceding four fiscal years.'' Id. at 6.
The Commission acknowledges that the Public Representative's
suggested revisions are a more concise and effective alternative to
achieving the intent of the proposed rules. The Commission finds that
adopting the minor changes creates more precise requirements and will
improve the quality, accuracy, and completeness of the Postal Service's
reporting. Accordingly, the Commission adopts the Public
Representative's suggested reorganization and rewording in its final
rules.
2. Comments Regarding Proposed Sec. 3050.21(m)
The U.S. Chamber of Commerce, NAM, and UPS, each support proposed
Sec. 3050.21(m), requiring the Postal Service to provide Inbound
Letter Post revenue, volume, attributable cost, and contribution data
by UPU country group and shape.\28\ Those commenters note the
importance of transparency and public access to Inbound Letter Post
data, and identify particular public interest in the Inbound Letter
Post product.
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\28\ Chamber of Commerce Comments; NAM Comments at 1-2; August
17 UPS Comments at 8.
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The Postal Service opposes the proposed reporting requirement,
arguing that information sought: (1) Is unrelated to the Commission's
performance of its annual compliance determination; (2) would encourage
incomplete and misleading analysis of Inbound Letter Post performance;
and (3) would create a risk of harm from disclosure of commercially
sensitive data of third parties. Postal Service Comments at 7. For the
reasons set forth below, the Commission declines to make any additional
modifications to proposed Sec. 3050.21(m).
a. The Requirement Is Related to the Commission's ACD
The Postal Service suggests that the Commission's conclusions on
the Inbound Letter Post product are ``inapplicable to the current and
future performance'' of the product. Id. at 8. The Postal Service also
states that those conclusions provide no justification for the
disaggregation of Inbound Letter Post data by UPU country group and
shape. Id.
As noted in Order No. 4706, it is not uncommon for the Commission
to seek enhanced information about products of particular concern. For
example, in the FY 2017 ACD report, the Commission chose to analyze
Periodicals volume, revenue, attributable cost, and contribution, as
well as unit revenue, unit attributable cost, and unit
[[Page 49290]]
contribution for fiscal years 2007 through 2017.\29\ The Commission,
noting a year-after-year trend for the Periodicals class, requested
this enhanced disaggregated data in order to address ongoing issues
with the class. The past performance of the Periodicals class, while
not directly at issue in the ACD, showed a trend of insufficient
Periodicals revenues to cover attributable costs.
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\29\ Order No. 4706 at 17; Docket No. ACR2017, Annual Compliance
Determination Report, Fiscal Year 2017, March 29, 2018, at 44-45 (FY
2017 ACD).
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When the Commission determines the noncompliance of a product,
pursuant to 39 U.S.C. 3653(c), it must order that the Postal Service
``take such action as the Commission considers appropriate in order to
achieve compliance.'' 39 U.S.C. 3662(c). Conducting a trend analysis,
as done for the Periodicals class during the FY 2017 annual compliance
review, best allows the Commission to determine the appropriate
remedial actions. Past performance of the product, particularly where
it shows a trend of continued failure to cover its attributable costs,
is relevant when determining the appropriate corrective action in an
ACD.
As noted in Order No. 4706, there is a well-documented history of
concern about Inbound Letter Post's ongoing negative contribution, both
in Commission orders and in stakeholder comments.\30\ Additionally, a
recent Presidential Memorandum directed the executive branch to seek
reforms within the UPU's terminal dues system that provides: (1) Fair
and nondiscriminatory terminal dues that promote unrestricted and
undistorted competition; (2) terminal dues that cover the costs of
delivering Inbound Letter Post mailpieces; (3) and terminal dues that
avoid favoring foreign mailers over domestic mailers or favoring postal
operators over private sector entities.\31\ This Presidential
Memorandum highlights the Administration's focus on the Inbound Letter
Post product. Accordingly, the Commission finds that providing enhanced
data for the purposes of conducting a trend analysis across a period of
years is appropriate, particularly where the prices for a product or
products have routinely been non-compensatory.
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\30\ Order No. 4706 at 18 n.35. See Docket No. IM2016-1,
Congressional Letter to Secretary of State Rex Tillerson and
Postmaster General Megan Brennan, November 8, 2017; Docket No.
ACR2017, Comments of James Smaldone, Founder & CEO, Mighty Mug,
Inc., January 25, 2018, at 1-2; Docket No. ACR2017, Comments of
National Association of Manufacturers on Order No. 4377, January 24,
2018, at 2; Docket No. ACR2017, Comments of United Parcel Service,
Inc. in Response to Notice of Preliminary Determination to Unseal
the Material Filed in Response to Chairman's Information Request No.
1, Question 1, January 24, 2018, at 2-3; Docket No. ACR2017,
Comments of the Honorable Kenny Marchant on Determination to Unseal
the Material Filed in Response to Chairman's Information Request No.
1, Question 1, January 25, 2018, at 1-2; Docket No. ACR2017,
Comments of U.S. Chamber of Commerce, January 25, 2018, at 1-2;
Docket No. ACR2017, Comments of SBE Council Related to Inbound
Letter Post, February 20, 2018, at 1-2; Docket No. ACR2017, Comments
of United Parcel Service, Inc. in Response to Notice of Preliminary
Determination to Unseal the Postal Service's Response to Chairman's
Information Request No. 15, February 23, 2018, at 3-4; Docket No.
ACR2017, Reply Comments of United Parcel Service, Inc. on United
States Postal Service Motion for Reconsideration of Order No. 4551,
April 13, 2018, at 4; Docket No. ACR2017, Comments of U.S. Chamber
of Commerce, April 13, 2018, at 1; Docket No. IM2018-1, Comments
Received from U.S. Representatives Kenny Marchant and Ralph Abraham,
July 3, 2018, at 1; Docket No. IM2018-1, Comment Received from U.S.
Senator Bill Cassidy, M.D., July 3, 2018, at 1.
\31\ See Presidential Memorandum for the Secretary of State,
Secretary of the Treasury, Secretary of Homeland Security,
Postmaster General, and Chairman of the Postal Regulatory
Commission, August 23, 2018, available at: https://www.whitehouse.gov/presidential-actions/presidential-memorandum-secretary-state-secretary-treasury-secretary-homeland-security-postmaster-general-chairman-postal-regulatory-commission/.
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The Postal Service notes that a new terminal dues system that
charges higher prices for bulky letters and small packets than for
letters and flats may improve the Inbound Letter Post product's
financial performance. Postal Service Comments at 8. The Postal Service
avers that the past performance of Inbound Letter Post under the former
terminal dues rate structure is not relevant to the Commission ACD
dockets under a new rate structure. Id. at 7-8.
The revenue, volume, attributable cost, and contribution data--even
for past years under a different terminal dues rate structure--are of
significant value in the Commission's ACD. The Commission's analysis of
these data assists in identifying the cause or causes of the product's
negative contribution. If for example, under the new rate structure,
the product continues to display similar trends, the Commission might
identify problems with the product unrelated to price structure. Price
structure is not singularly determinative of a product's financial
performance. Other factors might contribute to the product's
performance. For example, in its trend analysis on the Periodicals
class, the Commission identified declining productivity of mail
processing operations as a reason for the negative trend. See FY 2017
ACD at 50. The data required by proposed Sec. 3050.21(m) will assist
the Commission's efforts to identify the challenges facing the product,
and to make appropriate recommendations.
The new rate structure has separate rates for letters/flats and
bulky letters/small packets, which vary by UPU country group.\32\ The
Commission's ability to identify which rates account for what portion
of the product's contribution is critical to assessing how to improve
overall product cost coverage. To the extent that a new price structure
does improve Inbound Letter Post performance, such improvement will be
reflected in the data reporting, and more easily attributed to the
changes in price structure, due to the fuller picture provided by the
enhanced reporting.
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\32\ See Universal Postal Union, Decisions of the 2016 Istanbul
Conference, Universal Postal Convention, Final Protocol, Section
VII, Article 29, October 6, 2016.
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Given the public interest and the Commission's recurring findings
that Inbound Letter Post revenue fails to cover the product's costs,
the Commission finds that it is necessary and appropriate to require
reporting at this additional level of aggregation. The Postal Service's
current reporting format does not disaggregate by shape and UPU country
group so it is difficult to determine what particular aspect or aspects
of the terminal dues system are responsible for most of the negative
contribution. Providing this disaggregated information will aid the
Commission in determining the appropriate remedial action to prescribe.
Furthermore, the legislative history underlying the Postal
Accountability and Enhancement Act (PAEA) indicates that enhanced
transparency was a key motivation in the enactment of the PAEA.\33\ The
Commission, consistent with this goal, aims to be transparent in its
issuance of regulatory decisions and encourages public participation in
its dockets.\34\ In fact, the PAEA requires the Commission to consider
whether the public has access to ``timely, adequate information'' when
prescribing the content and form of the ACR. 39 U.S.C. 3652(e)(1)(A).
The additional Inbound Letter Post data required under proposed Sec.
3050.21(m) will not only improve the completeness of information
available to the
[[Page 49291]]
Commission for its determination, but will also enhance public
participation by presenting more comprehensive and understandable data
for a product of substantial public interest.
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\33\ Public Law 109-435, 120 Stat. 3198 (2006). Both the
committee report accompanying S. 2468, the Senate's 2004 postal
reform bill, and the committee report accompanying H.R. 22, the
House of Representatives' 2005 postal reform bill, noted that
enhanced transparency and accountability were essential aspects of
postal reform. S. Rep. No. 108-318 at 5 (2004), H.R. Rep. No. 109-
66, pt. 1 at 43 (2005).
\34\ See Postal Regulatory Commission, Guiding Principles,
Openness, available at: www.prc.gov/mission.
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The Postal Service also states that the proposed rule's 5-year
reporting period is inappropriate because of the year-to-year changes
in the composition of UPU country groups, and that data limitations may
reduce the Postal Service's ability to produce shape-based data for
previous years. Postal Service Comments at 9.
The Commission acknowledges that changes to the composition of UPU
country groups create year-to-year comparison challenges. However, the
Commission has experience in analyzing changes within and among
products. For example, the Commission has been able to account for
previous changes to the composition of UPU country groups in previous
ACDs.\35\ Thus, the Commission is prepared to address these challenges.
To the extent that the Postal Service lacks a full 5-year accounting of
shape-based data, the Commission notes that the Postal Service is able
to request the exclusion or partial exclusion of that component of the
reporting requirement until such time that shape-based data becomes
available for an entire 5-year period. See 39 CFR 3055.3(a).
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\35\ See Docket No. ACR2016, Annual Compliance Determination
Report, Fiscal Year 2016, March 28, 2017, at 63-64.
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b. The Requirement Does Not Encourage Incomplete or Misleading Analysis
of Inbound Letter Post Performance
The Postal Service states that proposed Sec. 3050.21(m), if
implemented, will ``encourage the use of data that support an
incomplete and inaccurate evaluation of the financial performance of
inbound letter post.'' Postal Service Comments at 9. The Postal
Service's concern is that because proposed Sec. 3050.21(m) requires
reporting on the Inbound Letter Post product \36\ it will not reflect
the financial performance of other products the Postal Service
classifies as ``inbound letter post.'' \37\ The Postal Service suggests
that for an accurate assessment of the financial performance of
``inbound letter post,'' the Commission should consider volume and
supplemental revenue derived from those other products. The Postal
Service proposes an alternative reporting requirement for inbound
revenues and costs for MCS sections 1130, 1510.2, and 1602. Postal
Service Comments at 10-11. Notably, the Postal Service's proposal does
not require that the Postal Service report the alternative data by UPU
country group and shape. See id.
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\36\ MCS section 1130.
\37\ The Postal Service identifies these products as MCS
sections 1510.2.2 (International Ancillary Services, Inbound
International Registered Mail), 1602.5 (Negotiated Service
Agreements, International, Inbound Market Dominant Registered
Service Agreement 1), 1602.4 (Negotiated Service Agreements,
International, Inbound Market Dominant Expr[eacute]s Service
Agreement 1), 1602.6 (Negotiated Service Agreements, International,
Inbound Market Dominant PRIME Tracked Service Agreement, 1602.3
(Negotiated Service Agreements, International, Inbound Market
Dominant Multi-Service Agreements with Foreign Postal Operators 1),
July 15, 2018. Postal Service Comments at 10-11.
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The Commission finds the Postal Service's concerns about misleading
data unpersuasive. The Postal Service made a similar argument during
the FY 2017 ACD proceeding.\38\ In Docket No. ACR2017, the Postal
Service asserted that the analysis for the Inbound Letter Post product
should include analysis of ``the volume and revenue for supplemental
UPU remuneration for signature confirmation and tracking on registered
items as well as for bilateral market dominant NSAs and the PRIME
multilateral market dominant NSAs.'' FY 2017 ACD at 66. The Postal
Service stated that the Public Representative's analysis of the Inbound
Letter Post product was incomplete because it was limited to the volume
and revenue for the Inbound Letter Post product. Id. In the FY 2017 ACD
report, the Commission rejected the Postal Service's suggested analysis
and stated that ``[t]he Commission has consistently evaluated
compliance at the product level because products, by definition,
reflect distinct cost or market characteristics to which a rate or
rates are applied.'' Id. at 67.
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\38\ See Docket No. ACR2017, Reply Comments of the United States
Postal Service on Inbound Letter Post, February 27, 2018.
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In each ACD, the Commission reviews each product, including those
identified by the Postal Service as ``inbound letter post,'' for cost
coverage and compliance. For example, in FY 2017, the Commission found
that ``International Ancillary Services did not cover its attributable
cost due to the failure of International Registered Mail to cover its
attributable cost.'' Id. at 71. The Commission also reviewed Market
Dominant NSA products, finding that Inbound Market Dominant Multi-
Service Agreements with Foreign Postal Operators 1, Inbound Market
Dominant Expr[eacute]s Service Agreement 1, and Inbound Market Dominant
Registered Service Agreement 1 products satisfied 39 U.S.C.
3622(c)(10), while Inbound Market Dominant PRIME Tracked Service
Agreement product did not. Id. at 74.
The Commission fulfills its mandate to determine whether the rates
or fees in effect comply with 39 U.S.C. 3622 at the product level. 39
U.S.C. 3653(b)(1). The Postal Service provides no compelling basis for
the Commission to depart from the reasonable practice of evaluating
compliance for each market dominant international mail product at the
product level. The other products the Postal Service classifies as
``inbound letter post'' are in fact distinct products from the Inbound
Letter Post product, and the performances of those products speak for
themselves. The Commission reviews those products for compliance
transparently in its ACD. Because the Commission makes a determination
of compliance for each of those products individually, increased
granularity will not give rise to a misleading representation of
Inbound Letter Post performance. In contrast, the Postal Service's
suggestion would mask the data by aggregating it with other products'
data, which would be less transparent and potentially misleading.
Accordingly, the Commission declines to remove the proposed reporting
requirement for the Inbound Letter Post product on the basis that the
additional data will be incomplete or misleading.
c. The Potential Risk of Commercial Harm Resulting From Disclosing
Commercially Sensitive Data of Third Parties is Outside the Scope of
This Rulemaking Proceeding
The Postal Service states that requiring reporting of additional
data by UPU country group and shape would put commercially sensitive
third-party information at risk of disclosure.\39\ The Postal Service
acknowledges it would file the Inbound Letter Post data required under
proposed Sec. 3050.21(m) under seal, but suggests that a non-public
filing would likely be challenged. Id.
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\39\ Postal Service Comments at 11-12. The Postal Service
incorporates by reference its discussion in Docket No. ACR2017. See
Docket No. ACR2017, United States Postal Service Motion for
Reconsideration of Order No. 4451, April 6, 2018; Docket No.
ACR2017, Response of the United States Postal Service to Order No.
4409, February 23, 2018; Docket No. ACR2017, United States Postal
Service Notice of Filing Nonpublic Folder USPS-FY17-NP40 and
Application for Nonpublic Treatment, February 14, 2018.
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The Postal Service acknowledges that the PAEA and the Commission
rules outline a procedure for application for non-public treatment of
information. See id. To the extent that the Postal Service believes
that public disclosure of Inbound Letter Post data separated by UPU
country group and shape would
[[Page 49292]]
cause a commercial harm, it could file an application for non-public
treatment pursuant to Sec. Sec. 3007.200 and 3007.201 of this chapter.
As noted in Order No. 4707, the application must particularly identify
``the nature and extent of the harm alleged and the likelihood of each
harm.'' \40\ The Commission's regulations also outlines a procedure for
participants or the Commission to seek to unseal material filed non-
publicly by the Postal Service. See 39 CFR 3007.103; see also 39 CFR
3007.104. Accordingly, the Commission will address the non-public
status of data filed under proposed Sec. 3050.21(m), if and when the
Postal Service files the data under seal and if the Commission issues a
preliminary determination concerning the appropriate degree of
protection, if any, to be accorded to materials filed under seal.
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\40\ Docket No. ACR2017, Order Denying Motion for
Reconsideration of Order No. 4451 as Moot, July 12, 2018, at 15
(Order No. 4707); see 39 CFR 3007.201(b)(4).
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The Commission finds that rules regarding non-public treatment of
commercially sensitive information are sufficient in addressing the
Postal Service's concerns. The Postal Service's assertion that a
challenge to a non-public disclosure would put the information ``at
risk'' is not itself enough reason to support removing the proposed
reporting requirement altogether. Accordingly, the Commission declines
to remove proposed Sec. 3050.21(m) on the basis of hypothetical risk
to commercially sensitive information.
3. Concerns Regarding Proposed Sec. 3050.21(j)
The Postal Service states that it agrees, in theory, that including
material routinely requested in ACR proceedings in the initial filing
is likely to be more efficient. Postal Service Comments at 4. The
Postal Service notes, however, that for fee distribution data, the
Commission's requests have sought the information in different formats
in each of the past three years. Id. at 5. The Postal Service correctly
attributes these format changes to continuing adjustments to products
lists. Id. The Postal Service, anticipating that those adjustments will
continue going forward, offers two suggestions for determining the
format of fee distribution data. Id. at 6.
The Postal Service suggests that the Commission might determine
that it is most efficient to continue the current practice of using an
information request specifying the format for the fee distribution
data. Id. Such a determination would obviate the need to adopt proposed
Sec. 3050.21(j) as a final rule. The Postal Service suggests that
alternatively, the Commission could allow the Postal Service to make
reasonable updates to the format of the report each year, pursuant to
the anticipated product adjustments. Id.
The Commission is satisfied with the Postal Service's proposal to
make efforts to make appropriate changes to the format of fee
distribution data based on product adjustments. In its annual
submission, the Postal Service should identify any such product
adjustments and corresponding format changes.
D. Removal of Unnecessary Requirement in Sec. 3050.60(c)
No commenter objects to the removal of the requirement that the
Postal Service provide hard-copy updates of publications and handbooks.
The Postal Service supports the modification. Id. at 3. Accordingly,
the Commission does not make any changes to proposed Sec. 3050.60(c).
E. Other Comments--Segment-Level Data
UPS requests that the Commission reconsider its position on a
proposal to require segment-level reporting for competitive products.
August 17 UPS Comments at 8. In Order No. 4706, the Commission
explained that it declined to propose such requirements, because the
current single segment reporting is adequate for determining
compliance. Order No. 4706 at 12-13. The PAEA allows the Commission to
consider the adequacy of information provided in determining the
lawfulness of rates charged, and can revise the reporting requirements
to ``improve the quality, accuracy, or completeness of Postal Service
data.'' 39 U.S.C. 3652(e)(2). UPS states that requiring segment-level
reporting ``would promote transparency and represent an improvement
over the status quo.'' August 17 UPS Comments at 8.
The Commission finds that UPS has not shown that the current
single-level reporting practices are inaccurate or inadequate. UPS must
show that the data, ``ha[ve] become significantly inaccurate or can be
significantly improved.'' 39 U.S.C. 3652(e)(2)(A) (emphasis added). The
proposal for segment-level reporting may be appropriate for review in
another docket devoted toward the question. In the instant docket,
however, UPS has not demonstrated the inadequacy in the current
reporting method or how it would be significantly improved for
determining compliance. In fact, the Commission finds that the current
single-level reporting is sufficiently accurate and adequate for the
purposes of assessing compliance. Accordingly, the Commission declines
to adopt rules requiring segment-level reporting for competitive
products.
V. Changes to the Proposed Rules
The final rules incorporate many of the commenters' suggestions.
The final rules contain the correction of some omissions from the
proposed rules, adjust the language of proposed rules, and restructure
and renumber proposed rules. The substance of the rules initially
proposed in Order No. 4706 largely remains the same. Below, the
Commission describes the differences between the proposed and final
rules.
A. Section 3050.21
Proposed Sec. 3050.21(f)(6) is revised to hyphenate the word
``non-compensatory'' pursuant to the suggestion of the Public
Representative. Also, because of the addition of paragraph (f)(6) of
this section, the word ``and'' at the end of paragraph (f)(4) of this
section is moved to the end of paragraph (f)(5) of this section. The
Commission adopts this revision pursuant to the Public Representative's
suggestion.
Proposed Sec. 3050.21(j) and (k) are revised as paragraphs (j)(1)
and (j)(2) of this section. Paragraph (j) of this section now reads
``For all market dominant and competitive products.'' Proposed
paragraph (j) of this section, now located at paragraph (j)(1) of this
section, required the distribution breakdown of mail fees. The final
rule replaces ``mail fees'' with ``fee revenues'' to more accurately
reflect that the requirement applies to some non-mail products.
Proposed paragraph (k) of this section, now located at paragraph (j)(2)
of this section required the Postal Service to ``provide . . . the
amount of any forfeited revenue.'' Final Sec. 3050.21(j)(2) revises
the proposed rule, now requiring that the Postal Service ``identify''
the amount of forfeited revenue.
Because the final rules combine proposed paragraphs (j) and (k) of
this section, the final rules require a minor restructuring and
renumbering. Proposed paragraphs (l) through (n) of this section are
revised and renumbered as paragraphs (k) through (m) of this section,
respectively.
The Commission also revises proposed Sec. 3050.21(m), renumbered
to Sec. 3050.21(l) in the final rules, pursuant to the Public
Representative's suggestion. The proposed rule required Inbound Letter
Post Date ``for the preceding five fiscal years.'' Final
[[Page 49293]]
Sec. 3050.21(l) more precisely defines this requirement as ``the
fiscal year subject to review and each of the preceding four fiscal
years.''
Because of the renumbering, the Commission also adopts a revision
to proposed Sec. 3050.21(a), listing the required content of the
Postal Service's section 3652 report. The proposed rule states that the
report shall provide the items listed in paragraphs (b) through (n) of
this section. Consistent with the renumbering, the final rule states
that the report shall provide the items listed in paragraphs (b)
through (m) of this section.
The Commission also revises the amendatory instructions for the
Federal Register, consistent with the revisions made to Sec. 3050.21.
B. Section 3050.25
The Commission does not revise Sec. 3050.25 as proposed in Order
No. 4706.
C. Section 3050.28
In consideration of the comments of the Postal Service and the
Public Representative, the Commission makes several revision to
proposed Sec. 3050.28(b)(1), Table 1 and Table 2.
The final rules add the input ``Total Revenue'' beneath the sub-
inputs for ``Operating Revenue'' and ``Other Revenue'' and above
``Operating Expenses'' in Table 1. This revision is consistent with the
explanation of changes in Order No. 4706. Pursuant to the Postal
Service's suggestion, the Commission revises the input ``New Operating
Income'' in proposed Table 1. The final rules correct the input to
``Net Operating Income.'' The final rules also remove a duplicative
heading row in Table 1 and extraneous underlining within certain cells
in Table 2.
The Commission, pursuant to the Public Representative's suggestion,
revises the amendatory instructions preceding final Sec. 3050.28, to
indicate that the introductory language in paragraph (b) of this
section also contains revisions. The content of the introductory text
of paragraph (b) of this section remains unchanged from that proposed
in Order No. 4706.
D. Section 3050.60(c)
The Commission does not revise Sec. 3050.50(c) as proposed in
Order No. 4706.
VI. Ordering Paragraphs
It is ordered:
1. Part 3050 of title 39, Code of Federal Regulations, is revised
as set forth below the signature of this Order, effective 30 days after
publication in the Federal Register.
2. The Postal Service shall make a good-faith effort to make
appropriate adjustments to the format of the fee distribution in each
year's Annual Compliance Report, as necessary to reflect product
changes.
3. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Stacy L. Ruble,
Secretary.
List of Subjects in 39 CFR Part 3050
Administrative practice and procedure, Reporting and recordkeeping
requirements.
For the reasons discussed in the preamble, the Commission amends
Chapter III of title 39 of the Code of Federal Regulations as follows:
PART 3050--PERIODIC REPORTING
0
1. The authority citation for part 3050 continues to read as follows:
Authority: 39 U.S.C. 503, 3651, 3652, 3653.
0
2. Amend Sec. 3050.21 by:
0
a. Revising paragraphs (a) and (f)(4) and (5),
0
b. Adding paragraph (f)(6),
0
c. Revising paragraph (j), and
0
d. Adding paragraphs (k), (l), and (m).
The revisions and addtions read as follows:
Sec. 3050.21 Content of the Postal Service's section 3652 report.
(a) No later than 90 days after the close of each fiscal year, the
Postal Service shall submit a report to the Commission analyzing its
costs, volume, revenue, rate, and service information in sufficient
detail to demonstrate that all products during such year comply with
all applicable provisions of title 39 of the United States Code. The
report shall provide the items in paragraphs (b) through (m) of this
section.
* * * * *
(f) * * *
(4) Analyze the contribution of the agreement to institutional
costs for its most recent year of operation. The year analyzed shall
end on the anniversary of the negotiated service agreement that falls
within the fiscal year covered by the Postal Service's annual periodic
reports to the Commission and include the 12 preceding months. The
analysis shall show all calculations and fully identify all inputs.
Inputs used to estimate the effect on total contribution to the Postal
Service, such as unit costs and price elasticities, shall be updated
using fiscal year values;
(5) Analyze the effect of the negotiated service agreement (and
other functionally equivalent negotiated service agreements) on the
marketplace. If there were harmful effects, explain why those effects
were not unreasonable; and
(6) Provide financial or other supporting documentation that
demonstrates that non-compensatory market dominant negotiated service
agreements improve the net financial position of the Postal Service
over default rates or enhance the performance of mail preparation,
processing, transportation, or other functions.
* * * * *
(j) For all market dominant and competitive products:
(1) Provide a distribution breakdown of fee revenues, including all
underlying calculations and source workpapers; and
(2) Provide any third-party service performance results upon which
any financial penalty or bonus is determined, and identify the amount
of any forfeited revenue;
(k) Provide all total workhour data and data sources showing
workhour measurements by Labor Distribution Code;
(l) For the Inbound Letter Post product, provide revenue, volume,
attributable cost, and contribution data by Universal Postal Union
country group and by shape for the preceding the fiscal year subject to
review and each of the preceding four fiscal years; and
(m) Provide any other information that the Postal Service believes
will help the Commission evaluate the Postal Service's compliance with
the applicable provisions of title 39 of the United States Code.
0
3. Amend Sec. 3050.25 by revising paragraphs (c), (d), and (e) to read
as follows:
Sec. 3050.25 Volume and revenue data.
* * * * *
(c) Revenue, pieces, and weight by rate category and special
service by quarter, within 40 days of the close of Quarters 1, 2, and 3
of the fiscal year and 60 days after Quarter 4, but no later than the
filing of reports filed pursuant to section 3050.40(a) or 3050.40(b);
(d) Quarterly Statistics Report, including estimates by shape,
weight, and indicia, within 40 days of the close of Quarters 1, 2, and
3 of the fiscal year and 60 days after Quarter 4 but no later than the
filing of reports filed pursuant to section 3050.40(a) or 3050.40(b);
and
(e) Billing determinants within 60 days of the close of Quarters 1,
2, and
[[Page 49294]]
3 of the fiscal year and 90 days after Quarter 4.
0
4. Amend Sec. 3050.28 by revising paragraph (b) introductory text,
tables 1 and 2 in paragraph (b)(1), and paragraph (c) to read as
follows:
Sec. 3050.28 Monthly and pay period reports.
* * * * *
(b) Monthly Summary Financial Report on the 24th day of the
following month, except that the reports for the last months of
Quarters 1, 2, and 3 of the fiscal year shall be provided at the time
that the Form 10-Q report is provided and the report for the last month
of Quarter 4 of the fiscal year shall be provided at the time that the
Form 10-K report is provided;
(1) * * *
Table 1--USPS Monthly Financial Statement
Month, Fiscal Year
[$ millions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Current Period Year-to-Date
-------------------------------------------------------------------------------------------------------------------------------
Actual Plan SPLY % Plan Var % SPLY Var Actual Plan SPLY % Plan Var % SPLY Var
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Revenue:
Operating Revenue
Other Revenue
Total Revenue
Operating Expenses
Personnel Compensation and Benefits
Transportation
Supplies and Services
Other Services
Total Operating Expenses
Net Operating Income
Interest Income
Interest Expense
Total Net Income
Other Operating Statistics
Mail Volume (Millions)
Total Market Dominant Volumes
Total Competitive Product Volumes
Total Mail Volumes
Total Workhours (Millions)
Total Career Employees
Total Non-Career Employees
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Table 2--Mail Volume and Mail Revenue
Month, Fiscal Year
[Thousands]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current Period Year-to-Date
-----------------------------------------------------------------------------------------------------
Actual SPLY % SPLY Var Actual SPLY % SPLY Var
--------------------------------------------------------------------------------------------------------------------------------------------------------
Market Dominant Products:
First Class:
Volume
Revenue
Periodicals:
Volume
Revenue
USPS Marketing Mail:
Volume
Revenue
Package Services:
Volume
Revenue
All Other Market Dominant Mail:
Volume
Revenue
Total Market Dominant Products:
Volume
Revenue
Total Competitive Products
Volume
Revenue
Total Operating Revenue:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Volume
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 49295]]
* * * * *
(c) National Consolidated Trial Balances and the Revenue and
Expense Summary on the 24th day of the following month, except that the
reports for the last month of Quarters 1, 2, and 3 of the fiscal year
shall be provided at the time that the Form 10-Q report is provided and
the report for the last month of Quarter 4 of the fiscal year shall be
provided at the time that the Form 10-K report is provided;
* * * * *
0
5. Amend Sec. 3050.60 by revising paragraph (c) to read as follows:
Sec. 3050.60 Miscellaneous reports and documents.
* * * * *
(c) The items listed in paragraph (b) of this section in electronic
form;
* * * * *
[FR Doc. 2018-21249 Filed 9-28-18; 8:45 am]
BILLING CODE 7710-FW-P
