New Postal Products, 56887-56889 [2023-17904]
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Federal Register / Vol. 88, No. 160 / Monday, August 21, 2023 / Notices
plant, when adjusted for siting and
design variations, would provide useful
qualitative risk insights for other U.S.
operating plants.
III. Availability of Documents
The documents identified in the
following table are available to
interested persons through ADAMS, as
indicated.
ADAMS accession
No.
Document description
SRM–SECY–11–0089, ‘‘Options for Proceeding with Future Level 3 Probabilistic Risk Assessment (PRA) Activities’’ ............
Level 3 PRA Project, Volume 4: Overview of Reactor, At-Power, Level 1, 2, and 3 PRAs for Internal Fires, Seismic Events,
and High Winds; Draft Report for Comment .............................................................................................................................
Level 3 PRA Project, Volume 4a: Reactor, At-Power, Level 1 PRA for Internal Fires ................................................................
Level 3 PRA Project, Volume 4b: Reactor, At-Power, Level 1 PRA for Seismic Events .............................................................
Level 3 PRA Project, Volume 4c: Reactor, At-Power, Level 1 PRA High Winds and Other Hazards .........................................
Level 3 PRA Project, Volume 4d: Reactor, At-Power, Level 2 PRA for Internal Fires, Seismic Events, and High Winds .........
Level 3 PRA Project, Volume 4e: Reactor, At-Power, Level 3 PRA for Internal Fires, Seismic Events, and High Winds .........
Dated: August 9, 2023.
For the Nuclear Regulatory Commission.
Jonathan E. Evans,
Chief, Probability Risk Assessment Branch,
Division of Risk Analysis, Office of Nuclear
Regulatory Research.
I. Introduction
[FR Doc. 2023–17401 Filed 8–18–23; 8:45 am]
BILLING CODE 7590–01–P
POSTAL REGULATORY COMMISSION
[Docket Nos. MC2023–222 and R2023–4;
Order No. 6619]
Postal Regulatory Commission.
ACTION: Notice.
AGENCY:
The Commission is
recognizing a recent Postal Service filing
requesting the addition of a negotiated
service agreement with Publisher’s
Clearing House to the Market Dominant
product list. This notice informs the
public of the filing, invites public
comment, and takes other
administrative steps.
DATES: Comments are due: September
11, 2023.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
SUMMARY:
ddrumheller on DSK120RN23PROD with NOTICES1
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
On August 11, 2023, the Postal
Service filed a request to add a
negotiated service agreement (NSA)
with Publisher’s Clearing House (PCH)
to the Market Dominant product list.1 If
favorably reviewed by the Commission,
the intended effective date will be in
November or December 2023. Request at
1. The Request, which was filed
pursuant to 39 U.S.C. 3622 and 3642 as
well as 39 CFR 3040 subparts B and G,
triggers a notice-and-comment
proceeding.
II. Overview of the Postal Service’s
Filing
New Postal Products
Contents of filing. The Postal Service’s
filing consists of its Request, six
attachments, and one set of financial
workpapers:
• Attachment A—a copy of
Governors’ Resolution No. 23–5,
establishing price and classification
changes for Market Dominant products
to implement a negotiated service
agreement with PCH, which the Postal
Service asserts conforms with 39 CFR
3040.131(b);
• Attachment B—a copy of the instant
contract, which the Postal Service
asserts conforms with 39 CFR
3040.221(b);
• Attachment C—proposed changes
to the Mail Classification Schedule
(MCS), which the Postal Service asserts
conforms with 39 CFR 3040.131(f);
• Attachment D—a proposed data
collection plan, which the Postal
Service asserts conforms with 39 CFR
3040.222;
• Attachment E—a statement of
supporting justification, which the
Postal Service asserts conforms with 39
CFR 3040.132 and 39 CFR 3040.221(f)–
(j);
Table of Contents
I. Introduction
II. Overview of the Postal Service’s Filing
III. Initial Administrative Actions
IV. Ordering Paragraphs
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18:17 Aug 18, 2023
Jkt 259001
1 USPS Notice of Filing of Contract and
Supporting Data and Request to Add Publisher’s
Clearing House Negotiated Service Agreement to
the Market-Dominant Product List, with Portions
Filed Under Seal, August 11, 2023 (Request).
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ML23194A015
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• Attachment F—an application for
non-public treatment of ‘‘certain data
which reflect commercially sensitive
aspects of Publisher’s Clearing House’s
business model, response rates, and
strategy[,]’’ (id. Attachment F at 1),
appearing in the Request and financial
analysis, which the Postal Service
asserts conforms with 39 CFR part 3011;
and
• Supporting Financial Analysis—an
Excel file containing a financial
analysis, which the Postal Service
asserts conforms with 39 CFR
3040.221(f) and demonstrates that the
PCH NSA will improve the net financial
position of the Postal Service.
Request at 2–3, 9.
Background. The Postal Service
explains that in recent years the mailing
industry has seen steady year-over-year
decline in mail volumes. Id. at 3. To
compensate for industry shifts away
from direct mail, the Postal Service
states that it ‘‘has been looking to
strengthen its existing strategic
partnerships and build new ones when
opportunities arise.’’ Id. PCH ‘‘is a
prominent direct mail marketing
company that sends a variety of letter
mail to consumers related to
sweepstakes entries, marketing
materials, invoicing, and related
correspondence.’’ Id. The Postal Service
explains that ‘‘PCH typically interacts
with the Postal Service in a five-stage
mailing and shipping lifecycle, which
begins with promotional mailings and
ends with bill payments.’’ Id. at 3–4.
The Postal Service represents that
PCH has found that certain dormant
prospects (i.e., individuals not mailed to
in at least 3 months) ‘‘are no longer
profitable for PCH to send promotional
mail to, because the lifetime value of
these prospects falls below the cost of
mailing . . . .’’ Id. at 4. The Postal
Service asserts that an up-front discount
on an initial USPS Marketing Mail
promotional mailing would allow PCH
to inject reactivation volume into the
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ddrumheller on DSK120RN23PROD with NOTICES1
56888
Federal Register / Vol. 88, No. 160 / Monday, August 21, 2023 / Notices
cycle that it would not have mailed
under normal business practices. Id.
The Postal Service avers that the
resulting proportional increases in final
mail volume is anticipated to be two
times greater than if the dormant
prospect mailing list were never
reactivated. Id. Accordingly, the Postal
Service states that it engaged in
discussions with PCH ‘‘to determine
whether an NSA could help PCH make
these dormant prospecting mailings
economically feasible,’’ while at the
same time providing the Postal Service
‘‘with a needed boost in volume,
revenue, and contribution from
additional follow-on mailings.’’ Id.
The Postal Service’s position. The
Postal Service asserts that the PCH NSA
conforms to the policies embodied in
the Postal Accountability and
Enhancement Act (PAEA),2 the statutory
standards supporting the desirability of
special classifications (39 U.S.C.
3622(c)(10)), and associated regulations.
Id. at 3. The Postal Service provides a
statement of supporting justification
from Mr. Steven E. Mills, Director of
Product Management, Mailing Services,
which reviews the objectives and factors
appearing in 39 U.S.C. 3622(b) and (c)
and asserts, inter alia, that the PCH NSA
will provide an incentive for profitable
new mail; will enhance the financial
position of the Postal Service; will
encourage increased mail volume; and
will not imperil the ability of USPS
Marketing Mail (or the PCH NSA) to
cover its attributable costs. See id. at 2;
id. Attachment E at 1–3. The Postal
Service states that the PCH NSA would
also align with a core mission of the
Delivering for America plan, as it would
allow the Postal Service ‘‘to build and
set new rational pricing strategies with
long-standing partners.’’
Request at 4.
PCH NSA. The Postal Service states
that the PCH NSA is designed to give
PCH a discounted initial mailing of 1
million pieces of USPS Marketing Mail
letters, mailed at cost. Id. at 5. This
initial mailing would be limited to 1
million dormant prospecting customer
addresses, which PCH has not mailed to
within the past 3 months. Id. In
exchange for these discounts, the Postal
Service represents that PCH has
committed to certain performance
targets for follow-on mailings (both from
PCH to the addresses of the millionpiece mailing and to PCH from the
addresses of the million-piece mailing)
that are expected to result from the
initial mailing, also known as the
‘‘multiplier effect.’’ Id. PCH expects that
2 million pieces will result from the
2 Public
Law 109–435, 120 Stat. 3198 (2006).
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Jkt 259001
initial mailing, mailed at published
rates, within 9 months of the date of the
initial mailing. Id. If the parties deem
the initial mailing and performance
satisfactory, an additional second
prospecting mailing could be authorized
at least 6 months after the initial
mailing. Id. The Postal Service
represents that ‘‘[t]he same performance
period and targets would apply to the
second mailing.’’ Id.
The parties intend for the PCH NSA
to take effect in November or December
2023, assuming favorable review by the
Commission. Id. The Postal Service
states that the initial mailing date would
then be established at least 30 calendar
days after the effective date of the
contract, expected to be in January 2024
or shortly thereafter. Id. at 5–6. The
contract term would be for 1 year from
the date of the initial mailing. Id. at 6.
If the parties were to agree to a second
mailing, then the NSA term would
conclude 1 year from the date of the
second mailing. Id.
The contract contains a termination
for convenience provision, which
allows either party to terminate the NSA
without penalty upon 30 days’ written
notice to the other party, provided that
no termination by the Postal Service
would be effective during the 15-week
period prior to either the initial mailing
or the potential subsequent mailing. Id.
Additionally, either party may
immediately terminate the NSA for
breach of any material term of the
contact, if the breaching party fails to
cure such breach within 5 business days
after receiving written notice from the
non-breaching party describing the
breach. Id.
Similarly situated mailers. The Postal
Service states that if the NSA were to
prove successful at improving the
financial position of the Postal Service
as expected, then the Postal Service
‘‘stands ready to consider NSAs on
comparable terms to similarly situated
mailers, provided that [they] can
provide a similar ‘multiplier effect’ and
are willing to commit to performance
targets that mitigate the financial risk to
the Postal Service.’’ Id.
Financial analysis. The Postal Service
states that to both incent PCH to meet
certain performance targets and protect
the financial interests of the Postal
Service, the financial terms of the PCH
NSA consist of three primary
components:
• The Postal Service would provide
PCH with an initial 1-million-piece
mailing priced at the Postal Service’s
attributable cost, which the Postal
Service asserts would result in
approximately $128,000 in revenue. To
maintain this discount, PCH would
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need to achieve at least 50 percent of its
forecasted total multiplier volume.
• If PCH were to not achieve at least
50 percent of the forecasted multiplier
volume, PCH would lose the discount
on the initial mailing, which would be
paid back to the Postal Service. The
Postal Service asserts that this would
result in approximately $299,000 in
total postage and $171,000 in
contribution from the initial mailing,
plus however much multiplier
percentage PCH were able to achieve.
• If PCH were to achieve 90 percent
of more of the multiplier volume, the
Postal Service would provide an
additional discount to PCH of the price
paid for the initial mailing in the form
of a postage credit of approximately
$128,000.
Id. at 6–7. The Postal Service maintains
that under any scenario, it would see an
improvement in its financial position.
Id. at 8.
Possibility of harm to the
marketplace. Pursuant to 39 U.S.C.
3622(c)(10)(B), a Market Dominant NSA
may not ‘‘cause unreasonable harm to
the marketplace.’’ The Postal Service
maintains that the PCH NSA will not
cause any such harm. Id. at 10. The
Postal Service states that the NSA will
cover its attributable costs in all cases,
and to the extent the Postal Service
might have overestimated the multiplier
effect, risk mitigation provisions have
been agreed to, in which PCH must pay
back the amount of the discounted
mailing if specified performance metrics
are not achieved. Id. The Postal Service
notes that the Commission has
previously found ‘‘unreasonable harm to
the marketplace’’ to consist of
anticompetitive pricing, i.e., pricing
below cost,3 and the Postal Service
states that since the terms of the
contract would price the postage of the
initial mailing and the potential
subsequent mailing at cost, the
proposed rates would be neither
anticompetitive nor unreasonably
harmful to the marketplace.
Request at 10–11.
Notice. The Postal Service represents
that it will inform customers of the new
proposed classification changes and
associated price effects through
publication in the Federal Register. Id.
at 2.
3 See Docket Nos. MC2012–14 and R2012–8,
Order Approving Addition of Valassis Direct Mail,
Inc. Negotiated Service Agreement to the Market
Dominant Product List, August 23, 2012, at 27
(Order No. 1448); see also Newspaper Ass’n of
America v. Postal Regul. Comm’n, 734 F.3d 1208
(D.C. Cir. 2013) (denying petition for review of
Order No. 1448).
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Federal Register / Vol. 88, No. 160 / Monday, August 21, 2023 / Notices
III. Initial Administrative Actions
The Commission establishes Docket
No. MC2023–222 and Docket No.
R2023–4 for consideration of the
Request pertaining to the proposed new
product and the related contract,
respectively.
Interested persons may submit
comments on whether the Postal
Service’s filings in the captioned
dockets are consistent with the policies
of 39 U.S.C. 3622 and 3642, as well as
39 CFR part 3040. Comments are due
September 11, 2023. The public
portions of the Postal Service’s filing are
available for review on the
Commission’s website (https://
www.prc.gov). Comments and other
material filed in this proceeding will be
available for review on the
Commission’s website unless the
information contained therein is subject
to an application for non-public
treatment. The Commission’s rules on
non-public materials (including access
to documents filed under seal) appear in
39 CFR part 3011.
Pursuant to 39 U.S.C. 505, the
Commission appoints Stephanie A.
Quick to represent the interests of the
general public (Public Representative)
in these dockets.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket
No. MC2023–222 and Docket No.
R2023–4 for consideration of the matters
raised in each docket.
2. Pursuant to 39 U.S.C. 505,
Stephanie A. Quick is appointed to
serve as an officer of the Commission
(Public Representative) to represent the
interests of the general public in these
proceedings.
3. Comments are due September 11,
2023.
4. The Commission directs the
Secretary of the Commission to arrange
for publication of this order in the
Federal Register.
By the Commission.
Mallory Richards,
Attorney-Adviser.
[FR Doc. 2023–17904 Filed 8–18–23; 8:45 am]
BILLING CODE 7710–FW–P
ddrumheller on DSK120RN23PROD with NOTICES1
POSTAL REGULATORY COMMISSION
[Docket No. R2023–3; Order No. 6618]
Market Dominant Price Adjustment
Postal Regulatory Commission.
ACTION: Notice.
AGENCY:
The Commission is
recognizing a recently filed Postal
SUMMARY:
VerDate Sep<11>2014
18:17 Aug 18, 2023
Jkt 259001
Service notice of a Market Dominant
price change proposing two incentives,
along with proposed classification
changes. This notice informs the public
of the filing, invites public comment,
and takes other administrative steps.
DATES: Comments are due: September
11, 2023.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Overview of the Postal Service’s Filing
III. Initial Administrative Actions
IV. Ordering Paragraphs
I. Introduction
On August 11, 2023, the Postal
Service filed a notice of a Market
Dominant price change proposing two
incentives, along with classification
changes to the Mail Classification
Schedule (MCS).1 The intended
effective date for the two new incentives
is January 1, 2024. Notice at 1. The
Notice, which was filed pursuant to 39
CFR part 3030, triggers a notice-andcomment proceeding. 39 CFR 3030.124.
II. Overview of the Postal Service’s
Filing
The Postal Service’s filing consists of
the Notice, which the Postal Service
represents addresses applicable
requirements of 39 CFR 3030.122 and 39
CFR 3030.123; one PDF attachment
(Attachment A) to the Notice; and three
Excel workbooks entitled ‘‘Marketing
Mail Incentive_Projections.xls,’’ ‘‘First
Class Mail Incentive_Projections.xls,’’
and ‘‘CY24 Consolidated Incentives_
Projections.xlsx.’’
Attachment A includes the changes to
the MCS necessary to implement the
incentives. Notice, Attachment A. The
three Excel workbooks contain the
Postal Service’s financial models to
support the proposed incentives.2
The Postal Service states that
‘‘incentives build stronger relationships
1 United States Postal Service Notice of Market
Dominant Price Change Creating Two Incentives,
August 11, 2023 (Notice).
2 Notice, Excel files ‘‘Marketing Mail Incentive_
Projections.xls,’’ ‘‘First Class Mail Incentive_
Projections.xls,’’ and ‘‘CY24 Consolidated
Incentives_Projections.xlsx.’’
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56889
between the Postal Service and the
mailing industry and encourage mailers
to continue to use the mail to engage
with their customers, expand their
customer base, and increase customer
loyalty.’’ Notice at 2–3. The Postal
Service also asserts that ‘‘incentives
have the potential to improve the Postal
Service’s overall financial position.’’ Id.
at 3. Based on this, as well as declining
volume trends, the Postal Service
proposes an incentive for First-Class
Mail (First-Class Mail Growth Incentive)
and an incentive for USPS Marketing
Mail (Marketing Mail Growth Incentive).
Id.
The Postal Service states that the two
incentives are ‘‘substantially identical.’’
Id. A mailer would be eligible for the
First-Class Mail Growth Incentive when
its combined volume of qualifying
pieces in the incentive period, Calendar
Year (CY) 2024, exceeds the incentive
threshold. Id. The qualifying pieces are
First-Class Mail Presort Letters; FirstClass Mail Presort Cards; or First-Class
Mail Presort Flats. Id. Similarly, a
mailer would be eligible for the
Marketing Mail Growth Incentive when
its combined volume of qualifying
pieces in CY 2024 exceeds the incentive
threshold. Id. The qualifying pieces are
USPS Marketing Mail Letters and High
Density/Saturation Letters; USPS
Marketing Mail Flats and High Density/
Saturation Flats & Parcels; USPS
Marketing Mail Carrier Route; or USPS
Marketing Mail Parcels. Id.
Under both incentives, ‘‘for every
qualifying piece mailed in calendar year
2024 after the first million pieces,
mailers receive a credit equal to 30
percent of the average per-piece price
paid for mailing all qualifying pieces,
unless the volume of qualifying pieces
the mailer sent in the preceding fiscal
year exceeded 1,000,000 pieces. In that
case, credits accrue only after the mailer
surpasses its fiscal year 2023 volume of
qualifying pieces.’’ Id. The Postal
Service states that its use of CY 2024 for
the incentive period and Fiscal Year
2023 for the comparison period ‘‘is
intentional’’ and ‘‘allows the Postal
Service time to complete the
administrative setup of the incentives
before the incentive period begins.’’ Id.
at 4. The Postal Service states that
calculating the credits earned is
‘‘somewhat complex’’ because ‘‘[t]here
is more than one qualifying product for
each incentive, and within any given
product, pieces of different weights,
sortation levels, and dropship locations
have different prices.’’ Id. The Postal
Service states that for each incentive,
the credits earned are equal to ‘‘the total
actual price paid for all qualifying
pieces (not including any special
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]]>Agencies
[Federal Register Volume 88, Number 160 (Monday, August 21, 2023)]
[Notices]
[Pages 56887-56889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17904]
=======================================================================
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
[Docket Nos. MC2023-222 and R2023-4; Order No. 6619]
New Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The Commission is recognizing a recent Postal Service filing
requesting the addition of a negotiated service agreement with
Publisher's Clearing House to the Market Dominant product list. This
notice informs the public of the filing, invites public comment, and
takes other administrative steps.
DATES: Comments are due: September 11, 2023.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at https://www.prc.gov. Those who cannot submit comments
electronically should contact the person identified in the FOR FURTHER
INFORMATION CONTACT section by telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Overview of the Postal Service's Filing
III. Initial Administrative Actions
IV. Ordering Paragraphs
I. Introduction
On August 11, 2023, the Postal Service filed a request to add a
negotiated service agreement (NSA) with Publisher's Clearing House
(PCH) to the Market Dominant product list.\1\ If favorably reviewed by
the Commission, the intended effective date will be in November or
December 2023. Request at 1. The Request, which was filed pursuant to
39 U.S.C. 3622 and 3642 as well as 39 CFR 3040 subparts B and G,
triggers a notice-and-comment proceeding.
---------------------------------------------------------------------------
\1\ USPS Notice of Filing of Contract and Supporting Data and
Request to Add Publisher's Clearing House Negotiated Service
Agreement to the Market-Dominant Product List, with Portions Filed
Under Seal, August 11, 2023 (Request).
---------------------------------------------------------------------------
II. Overview of the Postal Service's Filing
Contents of filing. The Postal Service's filing consists of its
Request, six attachments, and one set of financial workpapers:
Attachment A--a copy of Governors' Resolution No. 23-5,
establishing price and classification changes for Market Dominant
products to implement a negotiated service agreement with PCH, which
the Postal Service asserts conforms with 39 CFR 3040.131(b);
Attachment B--a copy of the instant contract, which the
Postal Service asserts conforms with 39 CFR 3040.221(b);
Attachment C--proposed changes to the Mail Classification
Schedule (MCS), which the Postal Service asserts conforms with 39 CFR
3040.131(f);
Attachment D--a proposed data collection plan, which the
Postal Service asserts conforms with 39 CFR 3040.222;
Attachment E--a statement of supporting justification,
which the Postal Service asserts conforms with 39 CFR 3040.132 and 39
CFR 3040.221(f)-(j);
Attachment F--an application for non-public treatment of
``certain data which reflect commercially sensitive aspects of
Publisher's Clearing House's business model, response rates, and
strategy[,]'' (id. Attachment F at 1), appearing in the Request and
financial analysis, which the Postal Service asserts conforms with 39
CFR part 3011; and
Supporting Financial Analysis--an Excel file containing a
financial analysis, which the Postal Service asserts conforms with 39
CFR 3040.221(f) and demonstrates that the PCH NSA will improve the net
financial position of the Postal Service.
Request at 2-3, 9.
Background. The Postal Service explains that in recent years the
mailing industry has seen steady year-over-year decline in mail
volumes. Id. at 3. To compensate for industry shifts away from direct
mail, the Postal Service states that it ``has been looking to
strengthen its existing strategic partnerships and build new ones when
opportunities arise.'' Id. PCH ``is a prominent direct mail marketing
company that sends a variety of letter mail to consumers related to
sweepstakes entries, marketing materials, invoicing, and related
correspondence.'' Id. The Postal Service explains that ``PCH typically
interacts with the Postal Service in a five-stage mailing and shipping
lifecycle, which begins with promotional mailings and ends with bill
payments.'' Id. at 3-4.
The Postal Service represents that PCH has found that certain
dormant prospects (i.e., individuals not mailed to in at least 3
months) ``are no longer profitable for PCH to send promotional mail to,
because the lifetime value of these prospects falls below the cost of
mailing . . . .'' Id. at 4. The Postal Service asserts that an up-front
discount on an initial USPS Marketing Mail promotional mailing would
allow PCH to inject reactivation volume into the
[[Page 56888]]
cycle that it would not have mailed under normal business practices.
Id. The Postal Service avers that the resulting proportional increases
in final mail volume is anticipated to be two times greater than if the
dormant prospect mailing list were never reactivated. Id. Accordingly,
the Postal Service states that it engaged in discussions with PCH ``to
determine whether an NSA could help PCH make these dormant prospecting
mailings economically feasible,'' while at the same time providing the
Postal Service ``with a needed boost in volume, revenue, and
contribution from additional follow-on mailings.'' Id.
The Postal Service's position. The Postal Service asserts that the
PCH NSA conforms to the policies embodied in the Postal Accountability
and Enhancement Act (PAEA),\2\ the statutory standards supporting the
desirability of special classifications (39 U.S.C. 3622(c)(10)), and
associated regulations. Id. at 3. The Postal Service provides a
statement of supporting justification from Mr. Steven E. Mills,
Director of Product Management, Mailing Services, which reviews the
objectives and factors appearing in 39 U.S.C. 3622(b) and (c) and
asserts, inter alia, that the PCH NSA will provide an incentive for
profitable new mail; will enhance the financial position of the Postal
Service; will encourage increased mail volume; and will not imperil the
ability of USPS Marketing Mail (or the PCH NSA) to cover its
attributable costs. See id. at 2; id. Attachment E at 1-3. The Postal
Service states that the PCH NSA would also align with a core mission of
the Delivering for America plan, as it would allow the Postal Service
``to build and set new rational pricing strategies with long-standing
partners.''
---------------------------------------------------------------------------
\2\ Public Law 109-435, 120 Stat. 3198 (2006).
Request at 4.
PCH NSA. The Postal Service states that the PCH NSA is designed to
give PCH a discounted initial mailing of 1 million pieces of USPS
Marketing Mail letters, mailed at cost. Id. at 5. This initial mailing
would be limited to 1 million dormant prospecting customer addresses,
which PCH has not mailed to within the past 3 months. Id. In exchange
for these discounts, the Postal Service represents that PCH has
committed to certain performance targets for follow-on mailings (both
from PCH to the addresses of the million-piece mailing and to PCH from
the addresses of the million-piece mailing) that are expected to result
from the initial mailing, also known as the ``multiplier effect.'' Id.
PCH expects that 2 million pieces will result from the initial mailing,
mailed at published rates, within 9 months of the date of the initial
mailing. Id. If the parties deem the initial mailing and performance
satisfactory, an additional second prospecting mailing could be
authorized at least 6 months after the initial mailing. Id. The Postal
Service represents that ``[t]he same performance period and targets
would apply to the second mailing.'' Id.
The parties intend for the PCH NSA to take effect in November or
December 2023, assuming favorable review by the Commission. Id. The
Postal Service states that the initial mailing date would then be
established at least 30 calendar days after the effective date of the
contract, expected to be in January 2024 or shortly thereafter. Id. at
5-6. The contract term would be for 1 year from the date of the initial
mailing. Id. at 6. If the parties were to agree to a second mailing,
then the NSA term would conclude 1 year from the date of the second
mailing. Id.
The contract contains a termination for convenience provision,
which allows either party to terminate the NSA without penalty upon 30
days' written notice to the other party, provided that no termination
by the Postal Service would be effective during the 15-week period
prior to either the initial mailing or the potential subsequent
mailing. Id. Additionally, either party may immediately terminate the
NSA for breach of any material term of the contact, if the breaching
party fails to cure such breach within 5 business days after receiving
written notice from the non-breaching party describing the breach. Id.
Similarly situated mailers. The Postal Service states that if the
NSA were to prove successful at improving the financial position of the
Postal Service as expected, then the Postal Service ``stands ready to
consider NSAs on comparable terms to similarly situated mailers,
provided that [they] can provide a similar `multiplier effect' and are
willing to commit to performance targets that mitigate the financial
risk to the Postal Service.'' Id.
Financial analysis. The Postal Service states that to both incent
PCH to meet certain performance targets and protect the financial
interests of the Postal Service, the financial terms of the PCH NSA
consist of three primary components:
The Postal Service would provide PCH with an initial 1-
million-piece mailing priced at the Postal Service's attributable cost,
which the Postal Service asserts would result in approximately $128,000
in revenue. To maintain this discount, PCH would need to achieve at
least 50 percent of its forecasted total multiplier volume.
If PCH were to not achieve at least 50 percent of the
forecasted multiplier volume, PCH would lose the discount on the
initial mailing, which would be paid back to the Postal Service. The
Postal Service asserts that this would result in approximately $299,000
in total postage and $171,000 in contribution from the initial mailing,
plus however much multiplier percentage PCH were able to achieve.
If PCH were to achieve 90 percent of more of the
multiplier volume, the Postal Service would provide an additional
discount to PCH of the price paid for the initial mailing in the form
of a postage credit of approximately $128,000.
Id. at 6-7. The Postal Service maintains that under any scenario, it
would see an improvement in its financial position. Id. at 8.
Possibility of harm to the marketplace. Pursuant to 39 U.S.C.
3622(c)(10)(B), a Market Dominant NSA may not ``cause unreasonable harm
to the marketplace.'' The Postal Service maintains that the PCH NSA
will not cause any such harm. Id. at 10. The Postal Service states that
the NSA will cover its attributable costs in all cases, and to the
extent the Postal Service might have overestimated the multiplier
effect, risk mitigation provisions have been agreed to, in which PCH
must pay back the amount of the discounted mailing if specified
performance metrics are not achieved. Id. The Postal Service notes that
the Commission has previously found ``unreasonable harm to the
marketplace'' to consist of anticompetitive pricing, i.e., pricing
below cost,\3\ and the Postal Service states that since the terms of
the contract would price the postage of the initial mailing and the
potential subsequent mailing at cost, the proposed rates would be
neither anticompetitive nor unreasonably harmful to the marketplace.
---------------------------------------------------------------------------
\3\ See Docket Nos. MC2012-14 and R2012-8, Order Approving
Addition of Valassis Direct Mail, Inc. Negotiated Service Agreement
to the Market Dominant Product List, August 23, 2012, at 27 (Order
No. 1448); see also Newspaper Ass'n of America v. Postal Regul.
Comm'n, 734 F.3d 1208 (D.C. Cir. 2013) (denying petition for review
of Order No. 1448).
Request at 10-11.
Notice. The Postal Service represents that it will inform customers
of the new proposed classification changes and associated price effects
through publication in the Federal Register. Id. at 2.
[[Page 56889]]
III. Initial Administrative Actions
The Commission establishes Docket No. MC2023-222 and Docket No.
R2023-4 for consideration of the Request pertaining to the proposed new
product and the related contract, respectively.
Interested persons may submit comments on whether the Postal
Service's filings in the captioned dockets are consistent with the
policies of 39 U.S.C. 3622 and 3642, as well as 39 CFR part 3040.
Comments are due September 11, 2023. The public portions of the Postal
Service's filing are available for review on the Commission's website
(https://www.prc.gov). Comments and other material filed in this
proceeding will be available for review on the Commission's website
unless the information contained therein is subject to an application
for non-public treatment. The Commission's rules on non-public
materials (including access to documents filed under seal) appear in 39
CFR part 3011.
Pursuant to 39 U.S.C. 505, the Commission appoints Stephanie A.
Quick to represent the interests of the general public (Public
Representative) in these dockets.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. MC2023-222 and Docket No.
R2023-4 for consideration of the matters raised in each docket.
2. Pursuant to 39 U.S.C. 505, Stephanie A. Quick is appointed to
serve as an officer of the Commission (Public Representative) to
represent the interests of the general public in these proceedings.
3. Comments are due September 11, 2023.
4. The Commission directs the Secretary of the Commission to
arrange for publication of this order in the Federal Register.
By the Commission.
Mallory Richards,
Attorney-Adviser.
[FR Doc. 2023-17904 Filed 8-18-23; 8:45 am]
BILLING CODE 7710-FW-P
