Competitive Postal Products, 8377-8385 [2024-02281]
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Federal Register / Vol. 89, No. 26 / Wednesday, February 7, 2024 / Proposed Rules
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Thea D. Rozman Kendler,
Assistant Secretary for Export Administration
[FR Doc. 2024–01930 Filed 2–6–24; 8:45 am]
BILLING CODE 3510–JT–P
POSTAL REGULATORY COMMISSION
I. Background
II. Basis of Proposed Rules
III. Proposed Rules
39 CFR Parts 3000, 3010, 3040, 3041
[Docket No. RM2023–5; Order No. 6953]
RIN 3211–AA34
Competitive Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Notice of proposed rulemaking.
The Notice of Proposed
Rulemaking seeks comment on a
proposal for reviewing contracts
negotiated between the Postal Service
and customers for competitive services.
These contracts are known as
competitive negotiated service
agreements (NSAs). The proposal
includes a default method for reviewing
competitive NSAs and three optional
streamlined methods. Different
requirements apply to each method for
reviewing proposed competitive NSAs.
In addition, the proposal includes
requirements for administering
approved competitive NSAs. The
proposal is designed to streamline
competitive NSA review, ensure
transparency and accountability,
preserve existing flexibility, and enable
a smooth transition with minimum
disruption for stakeholders. This
document informs the public of the
filing, invites public comment, and
takes other administrative steps.
DATES: Comments are due: April 8,
2024; Reply comments are due: May 7,
2024.
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. The Rule Summary can be
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SUMMARY:
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found on the Commission’s Rule
Summary Page at https://www.prc.gov/
rule-summary-page.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
I. Background
A Negotiated Service Agreement
(NSA) is ‘‘a written contract, to be in
effect for a defined period of time,
between the Postal Service and a mailer,
which provides for customer-specific
rates or fees and/or terms of service in
accordance with the terms and
conditions of the contract.’’ 39 CFR
3010.101(f). These NSAs require prior
Commission approval before they are
added to the applicable product lists;
however, different statutory and
regulatory criteria apply to the approval
of Market Dominant NSAs and
Competitive NSAs.1
Before adding a product (such as a
Competitive NSA) to the Competitive
product list, the Commission undertakes
two types of review: (1) review under 39
U.S.C. 3642; and (2) review under 39
U.S.C. 3633. Upon consideration of
required information submitted by the
Postal Service, including projections of
the proposed product’s revenues and
costs and responses to any information
requests,2 the Commission determines
whether the product complies with the
requirements for Competitive products
1 See, e.g., 39 U.S.C. 3642; Postal Regulatory
Commission, Annual Report to the President and
Congress Fiscal Year 2021, January 25, 2022, at 26
(FY 2021 Annual Report) (stating that the
Commission reviews Market Dominant NSAs to
ensure they comply with 39 U.S.C. 3622(c)(10) and
the Commission’s regulations in 39 CFR part 3040,
subpart G); id. at 28 (stating that Competitive NSAs
require prior Commission review for compliance
with 39 U.S.C. 3633(a) and 39 CFR part 3035). The
focus of this docket is Competitive NSAs.
2 See 39 CFR 3035.105. This information includes
‘‘[s]ufficient revenue and cost data for the 12-month
period following the effective date of the rate or
class to demonstrate that each affected competitive
product will be in compliance with 39 U.S.C.
3633(a)(2)[.]’’ 39 CFR 3035.105(c)(1).
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in 39 U.S.C. 3642. The Commission also
makes a preliminary determination of
whether the proposed product will
comply with the criteria outlined in 39
U.S.C. 3633(a). Final determination of
compliance with 39 U.S.C. 3633(a) is
made retrospectively, in the
Commission’s Annual Compliance
Determination(s) (ACD), as set forth in
39 U.S.C. 3653.
Over the years, various efforts have
sought to streamline review of NSAs in
certain respects by applying the concept
of functional equivalence to groups of
NSAs.3 An ‘‘umbrella’’ product is a
grouping of NSAs that are functionally
equivalent to a baseline agreement. The
Commission has used a functional
equivalence analysis to approve
‘‘umbrella’’ product agreements.4 Nonpublished rates NSA products are a
refinement of ‘‘umbrella’’ products that
receive further streamlined review
because the products ‘‘conform to a
template agreement and offer prices
within specified, pre-approved ranges.’’
Order No. 5753 at 3. These products
must comply with Commission
classification and regulatory
requirements, including pre-approved
pricing formulas, minimum cost
coverage, and documentation, allow for
a streamlined review process because
3 See, e.g., Docket No. CP2008–5, Order
Concerning Global Expedited Package Services
Contracts, June 27, 2008 (Order No. 86).
4 See, e.g., Order No. 5753 at 2–3 (summarizing
the Commission’s approach to ‘‘umbrella’’
products); Docket No. R2013–9, Order Granting, in
Part, Motion for Partial Reconsideration of Order
No. 1864 and Modifying, in Part, Order No. 1864,
August 11, 2014, at 7 (Order No. 2148) (allowing
then-existing ‘‘umbrella’’ products to designate
multiple baseline agreements but ‘‘plan[ning] to
discontinue the practice of designating more than
one baseline reference.’’). The Commission also has
considered similar arrangements termed ‘‘shell
classifications,’’ which may use a ‘‘shell’’ or
template in lieu of an actual agreement as a
baseline. See Docket No. CP2008–8 et al., Order
Concerning Global Plus Negotiated Service
Agreements, June 27, 2008, at 7–8 (Order No. 85);
cf. Docket No. MC2008–6 et al., Order Concerning
Prices Under Inbound Direct Entry Contracts with
Certain Foreign Postal Administrations, September
4, 2008, at 3, 7 (Order No. 105).
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the contract template and financial
model are approved in advance.5
In Order No. 6446, the Commission
outlined concepts for potential
enhancements to its regime for adding
NSAs to the Competitive product list in
the Framework. See Order No. 6446 at
12. The core feature of the Framework
was establishing a three-track system for
categorizing and reviewing NSAs
proposed to be added to the Competitive
product list. Id. Under this Framework,
a proposed NSA would have been filed
in one of three tracks, and each track
would have had distinct filing and
review procedures providing different
levels of scrutiny and review. Id. These
tracks would have consisted of a
Custom NSA track, a Standard NSA
track, and an NPR NSA track. Id.
The Commission received comments
in response to Order No. 6446.
Previously, the Commission developed
a conceptual framework that
contemplated separate tracks for filing
and reviewing certain types of NSAs,
and requested comments thereon.
Having considered the comments
received, the Commission revises its
proposed regulations.
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II. Basis of the Proposed Rules
Despite improvements over time, the
Commission maintains that streamlining
and codifying the rules pertaining to
Competitive NSAs will provide
increased clarity concerning filing
requirements and review processes.
Codifying such procedures and
standards also provides an opportunity
to make improvements to the practices
and precedents that have developed,
while maintaining the opportunities for
pricing flexibility that NSAs afford the
Postal Service.
Specifically, the Commission
proposes to codify, with modifications,
its existing NSA filing and review
procedures as default rules for proposals
to add NSAs to the Competitive product
list. The Commission proposes to
codify, with modifications, existing,
optional, streamlined methods for
adding qualifying Umbrella products
and Non-Published Rate products to the
Competitive product list. The
Commission also proposes to create a
new streamlined filing option for
qualifying NSAs called Standardized
Distinct Products. Each streamlined
5 See
Order No. 5753 at 3; Docket Nos. MC2010–
29 and CP2010–72, Order Approving Postal Service
Request to Add Global Expedited Package Services–
Non-Published Rates 1 to the Competitive Product
List, November 22, 2010, at 15 (Order No. 593)
(‘‘[T]he model contract is based on business rules
which ensure that each contract covers its
attributable costs and makes a contribution to
institutional costs.’’).
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option would have distinct filing and
review procedures providing different
levels of scrutiny and streamlined
review. The intent is to preserve the
Postal Service’s existing contracting
flexibility with default review
procedures, while providing the option
for streamlined pre-implementation
review of NSAs that satisfy the
eligibility requirements of one of the
optional streamlined methods.
The Commission’s proposal provides
new filing and review procedures for
Standardized Distinct Product NSAs.
These procedures would include
advance review of financial models to
streamline review of individual NSAs
that are based on existing Postal Service
competitive products. Proposing new
Non-Published Rate Products also
would involve advance review of
financial models. By contrast, filing and
review procedures for Umbrella
Products would generally follow current
practices. Default filing and review
procedures would consist of current,
generally applicable filing and review
practices for Competitive NSAs (other
than Umbrella Product or NonPublished Rate Product NSAs).
The Commission also proposes rules
for administering NSAs on the
Competitive product list. These
proposed rules cover amendments,
renewals, extensions, and terminations
of Competitive NSAs, as well as
periodic reporting requirements.
The Commission’s proposal is
designed to streamline Competitive
NSA review, while ensuring
transparency and accountability,
preserving existing flexibility, and
enabling a smooth transition with
minimum disruption for stakeholders.
Under the Commission’s proposal, the
vast majority of proposed Competitive
NSAs should qualify for a streamlined
review procedure. Use of such
streamlined procedures, particularly the
Standardized Distinct Product option,
should markedly simplify adding new
NSAs to the Competitive product list.
List of Subjects
39 CFR Part 3000
Organization and functions, Seals and
insignia.
39 CFR Part 3010
Administrative practice and
procedure, Confidential business
information, Freedom of information,
Sunshine Act.
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39 CFR Part 3041
Administrative practice and
procedure, Postal service, Reporting and
recordkeeping requirements.
For the reasons stated in the
preamble, the Commission proposes to
amend chapter III of title 39 of the Code
of the Federal Regulations as follows:
PART 3000—THE COMMISSION AND
ITS OFFICES
1. The authority citation for part 3000
continues to read as follows:
■
Authority: 39 U.S.C. 503; 5 U.S.C. 552.
2. Amend § 3000.114 by revising
paragraph (a) to read as follows:
■
§ 3000.114
The Public Representative.
(a) Pursuant to 39 U.S.C. 505, the
Commission appoints a staff member,
on a case-by-case basis, to serve as a
representative of the general public’s
interests in public proceedings before
the Commission; pursuant to 39 U.S.C.
3653, 39 U.S.C. 3661, and 39 U.S.C.
3662, and 39 U.S.C. 3705, the
Commission also appoints a staff
member, on a case-by-case basis, to
serve as a representative of the general
public’s interests in certain proceedings;
and, pursuant to 39 U.S.C. 504(a), the
Chairman may appoint a staff member,
on a case-by-case basis, to serve as a
representative of the general public’s
interests in other proceedings before the
Commission. In all such proceedings,
the appointee is called the Public
Representative.
*
*
*
*
*
PART 3010—RULES OF PRACTICE
AND PROCEDURE
3. The authority citation for part 3010
continues to read as follows:
■
Authority: 39 U.S.C. 404(d); 503; 504;
3661.
§ 3010.101
Definitions.
4. Amend § 3010.101 by:
a. Redesignating paragraphs (p)
through (u) as paragraphs (q) through
(v);
■ b. Adding new paragraph (p); and
■ c. Revising newly redesignated
paragraph (q).
The revision and addition read as
follows:
■
■
III. Proposed Rules
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Administrative practice and
procedure, Foreign relations, Postal
service.
Sfmt 4702
§ 3010.101
Definitions
*
*
*
*
*
(p) Public proceeding means a
proceeding developing rules,
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regulations, and procedures or a
proceeding materially affecting the
interests of the general public. A
proceeding considering a request for
summary approval of a negotiated
service agreement or of an amendment
to a negotiated service agreement is not
a public proceeding. A proceeding
considering a request to amend a
negotiated service agreement for the sole
purpose of extending the expiration date
of the negotiated service agreement is
not a public proceeding.
(q) Public Representative or PR means
an officer of the Commission designated
to represent the interests of the general
public:
(1) In a public proceeding;
(2) With respect to any one of the
following:
(i) The Commission’s annual
determination of compliance;
(ii) A request for an advisory opinion
on a change in the nature of postal
services which will generally affect
service on a nationwide or substantially
nationwide basis,
(iii) A rate or service complaint; or
(iv) Appeal of a Postal Service
determination to close or consolidate a
post office; or
(3) As appointed by the Chairman.
*
*
*
*
*
§ 3010.102
Commission dockets.
5. Amend § 3010.102 by:
a. Redesignating paragraphs (d)(1)(vii)
through (xiv) as paragraphs (d)(1)(viii)
through (xv); and
■ b. Adding new paragraph (d)(1)(vii).
The addition read as follows:
■
■
§ 3010.102
Commission dockets
*
*
*
*
*
(d)(1) * * *
(vii) Competitive Negotiated Service
Agreement (K);
*
*
*
*
*
■ 6. Revise § 3010.140 to read as
follows:
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§ 3010.140
Opportunity to comment.
Except for proceedings involving an
appeal of a Postal Service determination
to close or consolidate a post office, any
person may submit comments in public
proceedings before the Commission. An
opportunity to provide a reply to
comments shall be at the discretion of
the Commission, or the presiding officer
if one is appointed. The scope and
timing of comments and reply
comments may be specified by notice,
order, or presiding officer’s ruling.
There is no requirement to intervene in
a proceeding as a party in order to
submit comments.
■ 7. Amend § 3010.152 by revising
paragraphs (a), (b)(5) and (b)(6) to read
as follows:
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§ 3010.152 Notices initiating dockets for
consideration of negotiated service
agreements.
(a) The Secretary shall issue a notice
to initiate a docket for each request that
proposes the addition or removal of a
negotiated service agreement from the
market dominant or the competitive
product list, or the modification of an
existing product currently appearing on
the market dominant or the competitive
product list. Multiple requests may be
combined into a single notice.
(b) * * *
(5) The appointment of an officer of
the Commission to represent the
interests of the general public in the
proceeding, unless the proceeding is not
a public proceeding.
(6) The comment deadline pertaining
to each request, unless the proceeding is
not a public proceeding.
*
*
*
*
*
■ 8. Amend § 3010.200 by revising
paragraph (b) to read as follows:
§ 3010.200
Applicability.
*
*
*
*
*
(b) Unless the Commission orders
otherwise, the rules in this subpart shall
not apply to proceedings governed by
subpart F of this part (Proceedings with
an Opportunity for a Hearing on the
Record). The rules in this subpart also
shall not apply to the following parts of
subchapter D of chapter III (Special
Rules of Practice for Specific Proceeding
Types) of this title: part 3020 (Rules
Applicable to Requests for Changes in
the Nature of Postal Services) of this
chapter, part 3021 (Rules for Appeals of
Postal Service Determinations to Close
or Consolidate Post Offices) of this
chapter, part 3022 (Rules for
Complaints) of this chapter, part 3023
(Rules for Rate or Service Inquiries) of
this chapter, and part 3024 (Special
Rules for Complaints Alleging
Violations of 39 U.S.C. 404a) of this
chapter. The rules in this subpart shall
not apply to any proceeding governed
by § 3041.325, § 3041.505(f), and
§ 3041.505(g) (Competitive Negotiated
Service Agreements) of this chapter.
PART 3040—PRODUCT LISTS AND
THE MAIL CLASSIFICATION
SCHEDULE
9. The authority citation for part 3040
continues to read as follows:
■
Authority: 39 U.S.C. 503; 3622; 3631;
3642; 3682.
10. Amend § 3040.101 by adding
paragraph (e) to read as follows:
■
§ 3040.101
Applicability.
*
*
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(e) Modification of the competitive
product list to add a competitive
negotiated service agreement is not
governed by this part but is governed by
part 3041 of this chapter. The rules in
part 3041 of this chapter regarding
removal of a negotiated service
agreement from the competitive product
list supersede any conflicting rules in
this part.
PART 3041—COMPETITIVE
NEGOTIATED SERVICE AGREEMENTS
■
11. Add part 3041 to read as follows:
PART 3041—COMPETITIVE
NEGOTIATED SERVICE AGREEMENTS
Subpart A—General
Sec.
3041.105
3041.110
General.
Definitions.
Subpart B—Advance Review
Sec.
3041.205 Advance review of non-published
rates products and standardized distinct
products.
Subpart C—Adding Negotiated Service
Agreements to the Competitive Product List
Sec.
3041.305 Applicability.
3041.310 General procedures and filing
requirements.
3041.315 Procedures and filing
requirements for umbrella products.
3041.320 Procedures and filing
requirements for non-published rates
negotiated service agreements.
3041.325 Procedures and filing
requirements for standard distinct
product negotiated service agreements.
Subpart D—Commission Review
Sec.
3041.405 Docket and notice.
3041.410 Required findings.
3041.415 Commission review and
disposition of requests to add negotiated
service agreements to the competitive
product list.
Subpart E—Negotiated Service Agreements
on the Competitive Product List
Sec.
3041.505 Amendments to competitive
negotiated service agreements.
3041.510 Renewals of competitive
negotiated service agreements.
3041.515 Extensions
3041.520 Terminations
Subpart F—Negotiated Service Agreement
Reporting and Compliance
Sec.
3041.605 Competitive negotiated service
agreement reporting requirements.
Authority: 39 U.S.C. 503; 39 U.S.C. 3633
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Subpart A—General
§ 3041.105
General.
(a) The rules in this part apply to
competitive negotiated service
agreements.
(b) When a general rule conflicts with
a rule governing a specific streamlined
option, the rule governing the specific
streamlined option shall take
precedence.
(c) Commission findings that the
addition of a competitive negotiated
service agreement to the competitive
product list is not inconsistent with the
standards of 39 U.S.C. 3633 are
provisional and subject to subsequent
review.
(d) The addition of a competitive
negotiated service agreement to the
competitive product list is limited to the
term of the negotiated service
agreement, as it may be extended. The
Commission will remove a negotiated
service agreement from the competitive
product list automatically upon the
expiration or termination of the
negotiated service agreement. Any
request to remove a negotiated service
agreement from the competitive product
list unrelated to expiration or
termination of the negotiated service
agreement shall follow the applicable
procedures outlined in part 3040 of this
chapter.
(e) When a rule in subpart E of this
part conflicts with a provision of a
negotiated service agreement added to
the competitive product list before the
effective date of this part, the provision
of the negotiated service agreement shall
take precedence.
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§ 3041.110
Definitions.
(a) Applicability. The definitions in
paragraphs (b) through (q) of this section
apply to this part.
(b) Baseline agreement. A negotiated
service agreement that serves as a model
for an included contract in an umbrella
product.
(c) Contract template. A template for
included contracts in a non-published
rates product.
(d) Financial model. A workbook
showing detailed projected cost,
revenue, and volume data for a
negotiated service agreement;
containing all supporting inputs and
calculations; and identifying the sources
of all such inputs. A financial model
must use accepted analytical principles
within the meaning of part 3050 of this
chapter and accepted quantification
techniques within the meaning of part
3050 of this chapter.
(e) Functionally equivalent negotiated
service agreements. Negotiated service
agreements that have similar cost
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characteristics and similar market
characteristics.
(f) Included contract. A negotiated
service agreement included as part of an
umbrella product or non-published rates
product.
(g) Minimum rates. The set of lowest
rates that could be offered pursuant to
the terms of a negotiated service
agreement, or specified in a financial
model, for each rate cell.
(h) Negotiated service agreement. As
defined in § 3010.101(f) of this chapter,
a written contract, to be in effect for a
defined period of time, between the
Postal Service and a mailer, which
provides for customer-specific rates or
fees and/or terms of service in
accordance with the terms and
conditions of the contract. A rate
associated with a negotiated service
agreement is not a rate of general
applicability.
(i) Non-published rates product. A
single product consisting of a contract
template and any included contracts
that are functionally equivalent to the
contract template and use a single
common financial model.
(j) Notice information. Contact
information specified in a negotiated
service agreement for one party to
provide the other party with notice in
accordance with the terms of the
negotiated service agreement.
(k) Negotiated Service Agreement
(NSA) summary proceeding. A
streamlined proceeding considering a
Postal Service request to add to the
competitive product list a product for
which use of a financial model has been
authorized in a streamlined-option
rulemaking or a Postal Service request
to amend such a product. Such a
proceeding is not a public proceeding.
(l) Postal Service executive. The
Postmaster General, the Deputy
Postmaster General, or a Postal Service
vice president.
(m) Rate cell. Each and every separate
rate identified in a financial model or
negotiated service agreement.
(n) Standardized distinct product. A
negotiated service agreement that is a
variation of one or more competitive
products offered as rates of general
applicability or added to the
competitive product list as rates not of
general applicability.
(o) Streamlined option. An optional
procedural approach to filing
requirements for a request to add a
negotiated service agreement to the
competitive product list and to review
of such negotiated service agreement.
(p) Streamlined-option rulemaking. A
rulemaking proceeding that considers
financial models, contract templates,
and Mail Classification Schedule
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changes in connection with a
streamlined option.
(q) Umbrella product. A single
product consisting of a baseline
agreement and one or more included
contracts that are functionally
equivalent to the baseline agreement.
Subpart B—Advance Review
§ 3041.205 Advance review of nonpublished rates products and standardized
distinct products.
(a) The Commission reviews proposed
financial models, minimum rates, and
Mail Classification Schedule changes in
streamlined-option rulemaking
proceedings to permit streamlined
review of non-published rates products
and standardized distinct products.
(b) Streamlined-option rulemaking
proceedings follow the procedures set
forth in part 3010, subpart E of this
chapter and the additional procedures
set forth in this section.
(c) In addition to providing the
information required by § 3010.201(b)(1)
of this chapter, a petition for a
streamlined-option rulemaking must:
(1) Provide a proposed financial
model containing:
(i) Minimum rates for all rate cells;
(ii) Projected volume for all rate cells;
(iii) Projected revenue at minimum
rates;
(iv) Projected costs attributable;
(v) Projected coverage of costs
attributable within the meaning of 39
U.S.C. 3633(a), expressed as a
percentage; and
(vi) All input data, sources, and
calculations used;
(2) Provide a narrative explanation of
how the proposed financial model
complies with paragraph (d)(1) of this
section;
(3) Explain why the projected cost,
revenue, and volume data in the
proposed financial model are reasonable
and reliable;
(4) Identify the existing competitive
product(s) on which proposed products
will be based and the Commission
order(s) in which such existing
competitive product(s) were determined
to be competitive;
(5) Identify each way in which
proposed products could differ from the
existing competitive product(s)
identified in paragraph (c)(4) of this
section;
(6) Explain why the potential
differences identified in paragraph (c)(5)
of this section do not cause any
proposed products to satisfy the
definition of a market dominant product
within the meaning of 39 U.S.C.
3642(b)(1); and
(7) Identify the Mail Classification
Schedule section in which proposed
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products will be listed and provide any
proposed changes therein in legislative
format.
(d) The financial model must:
(1) Demonstrate that each negotiated
service agreement that will use the
minimum rates is not inconsistent with
the standards of 39 U.S.C. 3633; and
(2) Rely on reasonable and reliable
projected cost, revenue, and volume
data.
(e) The Mail Classification Schedule
entry, including any proposed changes,
must:
(1) Identify all material differences
between proposed products and the
exiting competitive product(s) on which
proposed products are based;
(2) Specify all options and features of
proposed products included in the
financial model; and
(3) For proposed products based on an
existing product with rates not of
general applicability, including a
negotiated service agreement, describe
all material aspects of the proposed
products, including the information
identified in § 3040.104(b)(3)(ii)(A) of
this chapter.
(f) The Commission will issue an
order authorizing the proposed financial
model, minimum rates, and any Mail
Classification Schedule changes for use
in requests to add standardized distinct
products and non-published rates
products to the competitive product list
if, after review, the Commission finds
that:
(1) The financial model and minimum
rates are not inconsistent with the
standards of 39 U.S.C. 3633;
(2) The products using such proposed
financial model, minimum rates, and
Mail Classification Schedule changes
will be competitive products; and
(3) The proposed Mail Classification
Schedule changes comply with the
requirements of this section and are not
inconsistent with the proposed financial
model.
(g) As a condition of any
authorization issued pursuant to
paragraph (f) of this section, the Postal
Service shall be required to update the
financial model whenever more
accurate or complete cost, revenue, or
volume data are available and no less
frequently than every 12 months from
the date on which such authorization is
granted. Upon review of any updated
financial model, the Commission may
require changes to any applicable
minimum rates to ensure that the
minimum rates are not inconsistent
with the standards of 39 U.S.C. 3633.
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Subpart C—Adding Negotiated Service
Agreements to the Competitive
Product List
§ 3041.305
Applicability.
(a) This subpart imposes requirements
regarding the addition of negotiated
service agreements to the competitive
product list. These requirements are in
addition to other requirements imposed
by part 3035 of this chapter.
(b) The general requirements
appearing in § 3041.310 apply to a
request to add a negotiated service
agreement to the competitive product
list unless the request is filed under one
of the streamlined, alternative options
for competitive negotiated service
agreement consideration appearing in
§ 3041.315, § 3041.320, and § 3041.325.
(c) Section 3041.320 is not applicable
to any request to add an included
contract to a non-published rates
product listed on the competitive
product list as of the effective date of
this part. Any such request is governed
by the terms of the Commission order
approving the addition of such nonpublished rates contract to the
competitive product list.
§ 3041.310 General procedures and filing
requirements.
(a) Except as otherwise provided in
§§ 3041.315, 3041.320, and 3041.325 of
this part, in order to add a negotiated
service agreement to the competitive
product list, a request must be filed with
the Commission as provided in this
section and § 3035.105 of this chapter.
(b) Each request to add a negotiated
service agreement to the competitive
product list must include each of the
following items:
(1) A copy of the negotiated service
agreement;
(2) The rate and class decision of the
Postal Service Board of Governors under
39 U.S.C. 3632 relating to the proposed
negotiated service agreement and the
record of the proceedings in connection
with such decision;
(3) A copy of the applicable sections
of the Mail Classification Schedule and
the proposed changes therein in
legislative format;
(4) The name, and class if applicable,
of the proposed negotiated service
agreement;
(5) A description clearly explaining
the operative components of the
negotiated service agreement;
(6) An explanation of the reason for
initiating the docket and of why the
proposed negotiated service agreement
is not inconsistent with the applicable
requirements of this part and any
applicable Commission directives and
orders;
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(7) An explanation of the reasons why
the addition of the product to the
competitive product list will not result
in a violation of the standards of 39
U.S.C. 3633;
(8) Verification that the change does
not classify as competitive a product
over which the Postal Service exercises
sufficient market power that it can,
without risk of losing a significant level
of business to other firms offering
similar products:
(i) Set the price of such product
substantially above costs;
(ii) Raise prices significantly;
(iii) Decrease quality; or
(iv) Decrease output;
(9) Explanation of whether or not the
proposed negotiated service agreement
is covered by the postal monopoly as
reserved to the Postal Service under 18
U.S.C. 1696 subject to the exceptions set
forth in 39 U.S.C. 601;
(10) A description of the availability
and nature of enterprises in the private
sector engaged in the delivery of the
proposed negotiated service agreement
or substantially similar products;
(11) Any information available on the
views of those who use, or will use, the
proposed negotiated service agreement
on the appropriateness of the proposed
negotiated service agreement;
(12) A description of the likely impact
of the proposed negotiated service
agreement on small business concerns;
(13) The information required by
§ 3035.105(a) of this chapter;
(14) The information required by
§ 3035.105(b) of this chapter;
(15) The information required by
§ 3035.105(c) of this chapter;
(16) All other supporting justification
upon which the Postal Service proposes
to rely; and
(17) Such other information and data,
and such statements of reasons and
bases, as are necessary and appropriate
to fully inform the Commission of the
nature, scope, significance, and impact
of the proposed negotiated service
agreement.
(c) In order to authorize the addition
of a negotiated service agreement to the
competitive product list, the
Commission must:
(1) Give due regard to:
(i) The availability and nature of
enterprises in the private sector engaged
in the delivery of the proposed product;
(ii) The views of those who will use
the proposed product on the
appropriateness of adding the proposed
product to the competitive product list;
and
(iii) The likely impact of adding the
proposed product to the competitive
product list on small business concerns;
and
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(2) Make the following findings:
(i) The proposed negotiated service
agreement is a competitive product; and
(ii) The proposed negotiated service
agreement is not inconsistent with the
standards of 39 U.S.C. 3633.
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§ 3041.315 Procedures and filing
requirements for umbrella products.
(a) The procedures described in this
section and in § 3035.105(a) of this
chapter apply to requests to add an
included contract to an umbrella
product or to create an umbrella product
by adding an included contract to an
existing baseline agreement. Requests to
add a new negotiated service agreement
to the competitive product list for use as
a baseline agreement must instead
follow the requirements of § 3041.310.
(b) Any of the following negotiated
service agreements may function as a
baseline agreement:
(1) An active negotiated service
agreement, other than an included
contract in a non-published rates
product, listed on the competitive
product list as of the effective date of
this part.
(2) An active negotiated service
agreement added to the competitive
product list following a request
pursuant to § 3041.310.
(3) An expired or terminated
negotiated service agreement, other than
an included contract in a non-published
rates product or a standardized distinct
product, that the Commission
authorized to serve as a baseline
agreement before its expiration or
termination.
(c) Only the Postal Service is
permitted to propose to add an included
contract to an umbrella product.
(d) A proposal to add an included
contract to an umbrella product must
include:
(1) A copy of the proposed included
contract;
(2) The rate and class decision of the
Postal Service Board of Governors under
39 U.S.C. 3632 relating to the proposed
included contract and the record of the
proceedings in connection with such
decision;
(3) A statement identifying the
applicable baseline agreement;
(4) A copy of the applicable sections
of the Mail Classification Schedule and
the proposed addition thereto in
legislative format;
(5) A description clearly explaining
the operative components of the
included contract;
(6) An explanation of the reason for
initiating the docket and of why the
proposed negotiated service agreement
is not inconsistent with the applicable
requirements of this part and any
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applicable Commission directives and
orders;
(7) An explanation of the reasons why
the addition of the included contract to
the umbrella product will not result in
a violation of the standards of 39 U.S.C.
3633;
(8) A demonstration that the proposed
included contract is functionally
equivalent to the baseline agreement;
(9) The information required by
§ 3035.105(a) of this chapter;
(10) The information required by
§ 3035.105(b) of this chapter;
(11) The information required by
§ 3035.105(c) of this chapter;
(12) All other supporting justification
upon which the Postal Service proposes
to rely; and
(13) Such other information and data,
and such statements of reasons and
bases, as are necessary and appropriate
to fully inform the Commission of the
nature, scope, significance, and impact
of the proposed included contract.
(e) In order to authorize the addition
of an included contract to an umbrella
product, the Commission must make the
following findings:
(1) The proposed included contract is
functionally equivalent to the baseline
agreement; and
(2) With the addition of the proposed
included contract, the umbrella product
is not inconsistent with the standards of
39 U.S.C. 3633.
§ 3041.320 Procedures and filing
requirements for non-published rates
negotiated service agreements.
(a) A request to add a non-published
rates product to the competitive product
list must comply with the requirements
of this section and the requirements of
§ 3035.105(a) of this chapter.
(b) A non-published rates product
contract template may be proposed at
any time during or following the
pendency of a streamlined-option
rulemaking considering a proposed
financial model, minimum rates, and
Mail Classification Schedule changes for
standardized distinct products and nonpublished rates products.
(c) A non-published rates product is
added to the competitive product list
after:
(1) Issuance of a Commission order
authorizing the use of an applicable
financial model, minimum rates, and
Mail Classification Schedule changes in
a streamlined-option rulemaking; and
(2) Issuance of a Commission order
approving the non-published rates
product contract template.
(d) A non-published rates product
financial model, minimum rates, and
Mail Classification Schedule changes
must be, or have been, proposed in a
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streamlined-option rulemaking
proceeding.
(e) A proposal for a non-published
rates product contract template must
include the following information:
(1) The proposed non-published rates
product contract template;
(2) The rate and class decision of the
Postal Service Board of Governors under
39 U.S.C. 3632 relating to the proposed
non-published rates product contract
template and the record of the
proceedings in connection with such
decision;
(3) A copy of the applicable sections
of the Mail Classification Schedule and
the proposed addition therein in
legislative format;
(4) The number of the Commission
order approving the use of the financial
model associated with the proposed
non-published rates product contract
template or the number of the docket in
which the financial model associated
with the proposed non-published rates
product contract template is being
considered;
(5) A description clearly explaining
the operative components of the nonpublished rates product contract
template;
(6) A description of the availability
and nature of enterprises in the private
sector engaged in the delivery of the
postal services involved in the proposed
non-published rates product contract
template;
(7) A description of the views of those
who will use the postal services
involved in the proposed non-published
rates product contract template on the
appropriateness of the proposed nonpublished rates product contract
template;
(8) A description of the likely impact
of the proposed non-published rates
product contract template on small
business concerns;
(9) In lieu of the certified statement
required by § 3035.105(c)(2) of this
chapter, a sworn statement of a Postal
Service executive certifying that the
proposed non-published rates product
template is not inconsistent with the
financial model approved, or under
consideration by the Commission, in the
order or docket identified in paragraph
(e)(4) of this section;
(10) All other supporting justification
upon which the Postal Service proposes
to rely; and
(11) Such other information and data,
and such statements of reasons and
bases, as are necessary and appropriate
to fully inform the Commission of the
nature, scope, significance, and impact
of the proposed non-published rates
product contract template.
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(f) A non-published rates product
contract template may include optional
provisions to be selected by customers,
provided that:
(1) The addition of any optional
provision in any included contract will
not be inconsistent with the standards
of 39 U.S.C. 3633;
(2) The addition of any optional
provision in any included contract
represents a minor change to the
included contract; and
(3) Each included contract that could
be derived from the contract template is
functionally equivalent to every other
included contract that could be derived
from the contract template.
(g) In order to authorize the addition
of a non-published rates product to the
competitive product list, the
Commission must:
(1) Give due regard to:
(i) The availability and nature of
enterprises in the private sector engaged
in the delivery of the proposed product;
(ii) The views of those who will use
the proposed product on the
appropriateness of adding the proposed
product to the competitive product list;
and
(iii) The likely impact of adding the
proposed product to the competitive
product list on small business concerns;
and
(2) Make the following findings:
(i) The proposed non-published rates
product is a competitive product; and
(ii) The proposed non-published rates
product contract template is not
inconsistent with the standards of 39
U.S.C. 3633.
(h) After a non-published rates
product has been approved, the Postal
Service may add one or more included
contracts to the product without filing a
request or otherwise obtaining further
approval from the Commission,
provided that:
(1) The included contract does not
deviate in any way from the nonpublished rates product contract
template;
(2) No rate in any included contract
is less than the corresponding minimum
rate authorized in the associated
streamlined-option rulemaking;
(3) The included contract bears a
unique serial number; and
(4) Within 10 days after the effective
date of each included contract, the
Postal Service:
(i) Notifies the Commission of the
effective date and scheduled expiration
date of the included contract; and
(ii) Files a version of the applicable
financial model updated to include all
projected cost, revenue, and volume
data specific to the included contract.
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(i) Only the Postal Service is
permitted to add an included contract to
a non-published rates product.
(j) If any included contract is
terminated before its scheduled
expiration date, the Postal Service must
inform the Commission within 7 days
after such termination.
(k) If the Commission finds that the
Postal Service has failed to comply with
any requirements of paragraphs (h) or (j)
of this section, the Commission may
take any of the following actions:
(1) Require the Postal Service to
request Commission approval in
accordance with such terms as the
Commission may specify by order, and
obtain such approval, before adding any
additional included contracts to nonpublished rates products; or
(2) Take other appropriate remedial
action.
§ 3041.325 Procedures and filing
requirements for standard distinct product
negotiated service agreements.
(a) A request to add a standardized
distinct product to the competitive
product list must comply with the
requirements of this section and the
requirements of § 3035.105(a) of this
chapter.
(b) A standardized distinct product
may be proposed at any time during or
following the pendency of a
streamlined-option rulemaking
proceeding considering a proposed
financial model, minimum rates, and
Mail Classification Schedule changes for
standardized distinct products and nonpublished rates products.
(c) A standardized distinct product is
added to the competitive product list
after:
(1) Issuance of a Commission order
authorizing the use of an applicable
proposed financial model, minimum
rates, and Mail Classification Schedule
changes in a streamlined-option
rulemaking; and
(2) Issuance of a Commission order
approving the addition of the
standardized distinct product to the
competitive product list in an NSA
summary proceeding.
(d) In each NSA summary proceeding,
the Postal Service shall submit:
(1) A copy of the negotiated service
agreement;
(2) The rate and class decision of the
Postal Service Board of Governors under
39 U.S.C. 3632 relating to the proposed
negotiated service agreement and the
record of the proceedings in connection
with such decision;
(3) A copy of the applicable sections
of the Mail Classification Schedule and
the proposed addition therein in
legislative format;
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(4) The number of the Commission
order resolving the streamlined-option
rulemaking proceeding applicable to the
proposed negotiated service agreement;
(5) The planned effective date(s) of
the planned rates.
(6) A description clearly explaining
the operative components of the
negotiated service agreement;
(7) An explanation of the reason for
initiating the docket and of why the
proposed standardized distinct product
is not inconsistent with the applicable
requirements of this part and any
applicable Commission directives and
orders;
(8) An explanation of the reasons why
the addition of the standardized distinct
product to the competitive product list
will not result in a violation of the
standards of 39 U.S.C. 3633;
(9) A description of the availability
and nature of enterprises in the private
sector engaged in the delivery of the
postal services that are the subject of the
proposed standardized distinct product;
(10) Any information available on the
views of those who use, or will use, the
proposed standardized distinct product
on the appropriateness of the proposed
standardized distinct product;
(11) A description of the likely impact
of the proposed standardized distinct
product on small business concerns;
(12) In lieu of the certified statement
required by § 3035(c)(2) of this chapter,
a sworn statement of a Postal Service
executive certifying that the proposed
standardized distinct product is not
inconsistent with the financial model
authorized for use in the applicable
Commission order identified in
paragraph (e)(4) of this section;
(13) In lieu of the revenue and cost
data required by § 3035.105(c)(1) of this
chapter, a version of the applicable
financial model updated to include all
projected cost, revenue, and volume
data specific to the proposed product;
(14) All other supporting justification
upon which the Postal Service proposes
to rely; and
(15) Such other information and data,
and such statements of reasons and
bases, as are necessary and appropriate
to fully inform the Commission of the
nature, scope, significance, and impact
of the proposed standardized distinct
product.
(e) Only the Postal Service is
permitted to propose to add a
standardized distinct product to the
competitive product list.
(f) In order to authorize the addition
of a standardized distinct product to the
competitive product list, the
Commission must:
(1) Give due regard to:
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(i) The availability and nature of
enterprises in the private sector engaged
in the delivery of the proposed product;
(ii) The views of those who will use
the proposed product on the
appropriateness of adding the proposed
product to the competitive product list;
and
(iii) The likely impact of adding the
proposed product to the competitive
product list on small business concerns;
and
(2) Make the following findings:
(i) The proposed standardized distinct
product is a competitive product; and
(ii) The proposed standardized
distinct product is not inconsistent with
the standards of 39 U.S.C. 3633.
Subpart D—Commission Review
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§ 3041.405
Docket and notice.
(a) The Commission will issue a
notice establishing a docket for each
request to add a negotiated service
agreement to the competitive product
list under this part. The Commission
will also issue notice upon receiving a
request complying with the
requirements of § 3041.505(b) to amend
an existing negotiated service
agreement. Notices issued pursuant to
this paragraph will include:
(1) The general nature of the
proceeding;
(2) A reference to the legal authority
pursuant to which the proceeding is to
be conducted;
(3) A concise description of the
proposal;
(4) If applicable, the identification of
an officer of the Commission to
represent the interests of the general
public in the docket;
(5) If applicable, a specified period for
public comment; and
(6) Such other information as the
Commission deems appropriate.
(b) The Commission will post the
notice on its website. The Commission
will promptly publish the notice in the
Federal Register.
(c) In the case of a request to add a
standardized distinct product to the
competitive product list or to amend a
standardized distinct product, an officer
of the Commission to represent the
interests of the general public will not
be appointed in the docket.
(d) In the case of a request to add a
standardized distinct product to the
competitive product list or to amend a
standardized distinct product, public
comment will not be requested in the
docket.
§ 3041.410
Required findings.
(a) In order to authorize the addition
of a negotiated service agreement to the
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competitive product list, the
Commission must make the findings
specified in § 3041.310, except as
provided in § 3041.315, § 3041.320, and
§ 3041.325.
(b) [Reserved].
§ 3041.415 Commission review and
disposition of requests to add negotiated
service agreements to the competitive
product list.
(a) The Commission will review each
request to add a negotiated service
agreement to the competitive product
list and any responsive comments,
except as set forth in § 3041.320
regarding non-published rates product
included contracts. The Commission
will either:
(1) Grant the request upon making the
required findings;
(2) Grant the request upon making the
required findings with such conditions
as the Commission may consider
appropriate;
(3) Deny the request; or
(4) Direct other action as the
Commission may consider appropriate.
(b) Each grant of a request under
paragraph (a)(1) or (a)(2) of this section
is conditional upon the submission of
accurate information in support of the
request. Any such grant may be revoked
if the Commission finds that any of the
information submitted with the request
contained a material misrepresentation.
Subpart E—Negotiated Service
Agreements on the Competitive
Product List
§ 3041.505 Amendments to competitive
negotiated service agreements.
(a) Except as provided in paragraph
(c) of this section, an amendment to an
existing negotiated service agreement is
not effective until the Commission has
approved the amendment. In order to
approve an amendment to an existing
negotiated service agreement the
Commission must find that the
negotiated service agreement, as
amended by the proposed amendment,
is not inconsistent with the standards of
39 U.S.C. 3633.
(b) A request to amend a negotiated
service agreement must include:
(1) A copy of the amendment;
(2) The planned effective date(s) of
the amendment;
(3) A statement explaining the
operative components of the
amendment; and
(4) If the amendment changes any
rates in the negotiated service
agreement,
(i) The information required by 39
CFR 3035.105(a) of this chapter;
(ii) The information required by 39
CFR 3035.105(b) of this chapter; and
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(iii) The information required by 39
CFR 3035.105(c) of this chapter, except
that, for a request to amend a
standardized distinct product, a copy of
the applicable financial model updated
to include all projected cost, revenue,
and volume data specific to the product,
as amended by the proposed
amendment, must be provided.
(5) All other supporting justification
upon which the Postal Service proposes
to rely; and
(6) Such other information and data,
and such statements of reasons and
bases, as are necessary and appropriate
to fully inform the Commission of the
nature, scope, significance, and impact
of the proposed amendment.
(c) An amendment to an existing
negotiated service agreement may take
effect upon filing with the Commission
without Commission approval if each of
the following requirements is satisfied:
(1) The Postal Service submits a
notice to the Commission containing:
(i) A copy of the amendment;
(ii) The planned effective date(s) of
the amendment;
(iii) A statement explaining the
operative components of the
amendment; and
(iv) A sworn statement from a Postal
Service executive attesting that the
amendment modifies the existing
negotiated service agreement only in
one or more of the ways specified in
paragraphs (c)(2), (e)(2), or (f)(2) of this
section; and
(2) The amendment modifies the
existing negotiated service agreement
only in one or more of the following
ways:
(i) Changing the customer’s name to
recognize a change to the legal name of
the customer;
(ii) Changing the customer’s address;
(iii) Changing the name of any
individual identified in the contract;
(iv) Changing notice information;
(v) Increasing any rates, prices, fees,
or charges in the negotiated service
agreement;
(d) Special rules regarding amending
umbrella products.
(1) A baseline agreement shall not be
amended, except to:
(i) Change the customer’s name to
recognize a change to the legal name of
the customer;
(ii) Change the customer’s address;
(iii) Change the name of any
individual identified in the contract;
(iv) Change notice information;
(v) Extend the term of the baseline
agreement in accordance with
§ 3041.515; or
(vi) Make rate changes not
inconsistent with the standards of 39
U.S.C. 3633.
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(2) An included contract in an
umbrella product shall not be amended,
unless the amendment remains
functionally equivalent to the baseline
agreement.
(e) Special rules regarding nonpublished rates products.
(1) A non-published rates contract
template shall not be amended.
(2) An included contract in a nonpublished rates product shall not be
amended, except to:
(i) Change the customer’s name to
recognize a change to the legal name of
the customer;
(ii) Change the customer’s address;
(iii) Change the name of any
individual identified in the contract;
(iv) Change notice information;
(v) Make rate changes provided that
the rates to be charged equal or exceed
the current minimum rates approved by
the Commission in the applicable
streamlined-option rulemaking;
(vi) Extend the included contract’s
expiration date provided that the rates
to be charged equal or exceed the
current minimum rates approved by the
Commission in the applicable
streamlined-option rulemaking;
(vii) Select an alternative optional
provision available in the contract
template.
(3) An amendment to an existing
included contract will take effect
without Commission further approval
upon filing with the Commission of the
notice specified in paragraph (c)(1) of
this section.
(f) Special rules regarding
standardized distinct products.
(1) A request to amend a standardized
distinct product is reviewed in an NSA
summary proceeding.
(2) An amendment to an existing
standardized distinct product may take
effect upon filing with the Commission
without Commission approval if:
(i) The Postal Service files the notice
specified in paragraph (c)(1) of this
section; and
(ii) The amendment modifies the
existing standardized distinct product
in one or more of the following ways:
(A) Changing the customer’s name to
recognize a change to the legal name of
the customer;
(B) Changing the customer’s address;
(C) Changing the name of any
individual identified in the contract;
(D) Changing notice information;
(E) Extending the standardized
distinct product’s expiration date
provided that the rates to be charged
equal or exceed the current minimum
rates approved by the Commission in
the applicable streamlined-option
rulemaking; or
(F) Implementing changes to rates
provided that such changed rates equal
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or exceed the current minimum rates
approved by the Commission in the
applicable streamlined-option
rulemaking.
(g) Special rules regarding a request to
amend a negotiated service agreement to
extend the expiration date of the
negotiated service agreement.
1. A request to amend a negotiated
service agreement to extend the
expiration date of the negotiated service
agreement must be submitted in
accordance with § 3041.515.
2. A proceeding considering a request
to amend a negotiated service agreement
to extend the expiration date of the
negotiated service agreement is not a
public proceeding.
(h) When a general rule conflicts with
a special rule in this section, the special
rule shall take precedence.
§ 3041.510 Renewals of competitive
negotiated service agreements.
(a) A renewal of a negotiated service
agreement is deemed a new negotiated
service agreement.
(b) A renewal of a competitive
negotiated service agreement will be
added to the competitive product list
pursuant to the applicable rules for
adding a new negotiated service
agreement to the competitive product
list.
§ 3041.515
Extensions
(a) A negotiated service agreement
may be extended prior to its expiration
date upon one of the following:
1. Timely filing of notice with the
Commission of the valid exercise of an
extension right in the negotiated service
agreement; or
2. Approval by the Commission of a
timely filed amendment extending the
expiration date of the negotiated service
agreement.
(b) For the purposes of paragraph (a)
of this section, a notice or amendment
is timely filed if it is filed at least 10
days prior to the expiration of the
negotiated service agreement.
(c) Upon expiration, a negotiated
service agreement shall be removed
automatically from the competitive
product list.
(d) No negotiated service agreement
shall remain on the competitive product
list following its expiration. An expired
negotiated service agreement shall not
be extended retroactively.
(e) Notwithstanding any other rule in
this chapter, the prohibitions in
paragraph (d) of this section shall not be
waived.
§ 3041.520
Terminations
(a) The Postal Service shall file notice
of the termination of a negotiated
PO 00000
Frm 00034
Fmt 4702
Sfmt 4702
8385
service agreement within 7 days after
such termination.
(b) Upon termination, a negotiated
service agreement shall be removed
automatically from the competitive
product list. No negotiated service
agreement shall remain on the
competitive product list after its
termination.
Subpart F—Negotiated Service
Agreement Reporting and Compliance
§ 3041.605 Competitive negotiated service
agreement reporting requirements.
(a) The Postal Service must file, on a
quarterly basis, a summary spreadsheet
listing all negotiated service agreements
active during any part of the prior
quarter. Negotiated service agreements
must be listed by Mail Classification
Schedule section or in such other way
as the Commission requires by order.
Such spreadsheet must identify all
extensions, expirations, and
terminations of negotiated service
agreements and any other information
the Commission requires by order.
(b) A report is due within 7 days after
the last day of each quarter of the fiscal
year.
(c) Upon finding that any report
contains significant omissions,
inaccuracies, or other deficiencies, the
Commission may take any of the
following actions:
1. Require the Postal Service to file
such reports on a more frequent basis;
2. Require a Postal Service executive
to submit a sworn statement attesting to
the accuracy and completeness of each
subsequent report; and
3. Impose other conditions the
Commission finds reasonable and
appropriate to ensure the accuracy and
completeness of such reports.
By the Commission.
Jennie Jbara,
Alternate Certifying Officer.
[FR Doc. 2024–02281 Filed 2–6–24; 8:45 am]
BILLING CODE 7710–FW–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 76
[MB Docket No. 24–20; FCC 24–2; FR ID
198390]
Customer Rebates for Undelivered
Video Programming During Blackouts
Federal Communications
Commission
ACTION: Notice of proposed rulemaking.
AGENCY:
In this document, the Federal
Communications Commission
SUMMARY:
E:\FR\FM\07FEP1.SGM
07FEP1
Agencies
[Federal Register Volume 89, Number 26 (Wednesday, February 7, 2024)]
[Proposed Rules]
[Pages 8377-8385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02281]
=======================================================================
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POSTAL REGULATORY COMMISSION
39 CFR Parts 3000, 3010, 3040, 3041
[Docket No. RM2023-5; Order No. 6953]
RIN 3211-AA34
Competitive Postal Products
AGENCY: Postal Regulatory Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Notice of Proposed Rulemaking seeks comment on a proposal
for reviewing contracts negotiated between the Postal Service and
customers for competitive services. These contracts are known as
competitive negotiated service agreements (NSAs). The proposal includes
a default method for reviewing competitive NSAs and three optional
streamlined methods. Different requirements apply to each method for
reviewing proposed competitive NSAs. In addition, the proposal includes
requirements for administering approved competitive NSAs. The proposal
is designed to streamline competitive NSA review, ensure transparency
and accountability, preserve existing flexibility, and enable a smooth
transition with minimum disruption for stakeholders. This document
informs the public of the filing, invites public comment, and takes
other administrative steps.
DATES: Comments are due: April 8, 2024; Reply comments are due: May 7,
2024.
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. The Rule Summary can be found on the Commission's Rule
Summary Page at https://www.prc.gov/rule-summary-page.
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
I. Background
II. Basis of Proposed Rules
III. Proposed Rules
I. Background
A Negotiated Service Agreement (NSA) is ``a written contract, to be
in effect for a defined period of time, between the Postal Service and
a mailer, which provides for customer-specific rates or fees and/or
terms of service in accordance with the terms and conditions of the
contract.'' 39 CFR 3010.101(f). These NSAs require prior Commission
approval before they are added to the applicable product lists;
however, different statutory and regulatory criteria apply to the
approval of Market Dominant NSAs and Competitive NSAs.\1\
---------------------------------------------------------------------------
\1\ See, e.g., 39 U.S.C. 3642; Postal Regulatory Commission,
Annual Report to the President and Congress Fiscal Year 2021,
January 25, 2022, at 26 (FY 2021 Annual Report) (stating that the
Commission reviews Market Dominant NSAs to ensure they comply with
39 U.S.C. 3622(c)(10) and the Commission's regulations in 39 CFR
part 3040, subpart G); id. at 28 (stating that Competitive NSAs
require prior Commission review for compliance with 39 U.S.C.
3633(a) and 39 CFR part 3035). The focus of this docket is
Competitive NSAs.
---------------------------------------------------------------------------
Before adding a product (such as a Competitive NSA) to the
Competitive product list, the Commission undertakes two types of
review: (1) review under 39 U.S.C. 3642; and (2) review under 39 U.S.C.
3633. Upon consideration of required information submitted by the
Postal Service, including projections of the proposed product's
revenues and costs and responses to any information requests,\2\ the
Commission determines whether the product complies with the
requirements for Competitive products in 39 U.S.C. 3642. The Commission
also makes a preliminary determination of whether the proposed product
will comply with the criteria outlined in 39 U.S.C. 3633(a). Final
determination of compliance with 39 U.S.C. 3633(a) is made
retrospectively, in the Commission's Annual Compliance Determination(s)
(ACD), as set forth in 39 U.S.C. 3653.
---------------------------------------------------------------------------
\2\ See 39 CFR 3035.105. This information includes
``[s]ufficient revenue and cost data for the 12-month period
following the effective date of the rate or class to demonstrate
that each affected competitive product will be in compliance with 39
U.S.C. 3633(a)(2)[.]'' 39 CFR 3035.105(c)(1).
---------------------------------------------------------------------------
Over the years, various efforts have sought to streamline review of
NSAs in certain respects by applying the concept of functional
equivalence to groups of NSAs.\3\ An ``umbrella'' product is a grouping
of NSAs that are functionally equivalent to a baseline agreement. The
Commission has used a functional equivalence analysis to approve
``umbrella'' product agreements.\4\ Non-published rates NSA products
are a refinement of ``umbrella'' products that receive further
streamlined review because the products ``conform to a template
agreement and offer prices within specified, pre-approved ranges.''
Order No. 5753 at 3. These products must comply with Commission
classification and regulatory requirements, including pre-approved
pricing formulas, minimum cost coverage, and documentation, allow for a
streamlined review process because
[[Page 8378]]
the contract template and financial model are approved in advance.\5\
---------------------------------------------------------------------------
\3\ See, e.g., Docket No. CP2008-5, Order Concerning Global
Expedited Package Services Contracts, June 27, 2008 (Order No. 86).
\4\ See, e.g., Order No. 5753 at 2-3 (summarizing the
Commission's approach to ``umbrella'' products); Docket No. R2013-9,
Order Granting, in Part, Motion for Partial Reconsideration of Order
No. 1864 and Modifying, in Part, Order No. 1864, August 11, 2014, at
7 (Order No. 2148) (allowing then-existing ``umbrella'' products to
designate multiple baseline agreements but ``plan[ning] to
discontinue the practice of designating more than one baseline
reference.''). The Commission also has considered similar
arrangements termed ``shell classifications,'' which may use a
``shell'' or template in lieu of an actual agreement as a baseline.
See Docket No. CP2008-8 et al., Order Concerning Global Plus
Negotiated Service Agreements, June 27, 2008, at 7-8 (Order No. 85);
cf. Docket No. MC2008-6 et al., Order Concerning Prices Under
Inbound Direct Entry Contracts with Certain Foreign Postal
Administrations, September 4, 2008, at 3, 7 (Order No. 105).
\5\ See Order No. 5753 at 3; Docket Nos. MC2010-29 and CP2010-
72, Order Approving Postal Service Request to Add Global Expedited
Package Services-Non-Published Rates 1 to the Competitive Product
List, November 22, 2010, at 15 (Order No. 593) (``[T]he model
contract is based on business rules which ensure that each contract
covers its attributable costs and makes a contribution to
institutional costs.'').
---------------------------------------------------------------------------
In Order No. 6446, the Commission outlined concepts for potential
enhancements to its regime for adding NSAs to the Competitive product
list in the Framework. See Order No. 6446 at 12. The core feature of
the Framework was establishing a three-track system for categorizing
and reviewing NSAs proposed to be added to the Competitive product
list. Id. Under this Framework, a proposed NSA would have been filed in
one of three tracks, and each track would have had distinct filing and
review procedures providing different levels of scrutiny and review.
Id. These tracks would have consisted of a Custom NSA track, a Standard
NSA track, and an NPR NSA track. Id.
The Commission received comments in response to Order No. 6446.
Previously, the Commission developed a conceptual framework that
contemplated separate tracks for filing and reviewing certain types of
NSAs, and requested comments thereon. Having considered the comments
received, the Commission revises its proposed regulations.
II. Basis of the Proposed Rules
Despite improvements over time, the Commission maintains that
streamlining and codifying the rules pertaining to Competitive NSAs
will provide increased clarity concerning filing requirements and
review processes. Codifying such procedures and standards also provides
an opportunity to make improvements to the practices and precedents
that have developed, while maintaining the opportunities for pricing
flexibility that NSAs afford the Postal Service.
Specifically, the Commission proposes to codify, with
modifications, its existing NSA filing and review procedures as default
rules for proposals to add NSAs to the Competitive product list. The
Commission proposes to codify, with modifications, existing, optional,
streamlined methods for adding qualifying Umbrella products and Non-
Published Rate products to the Competitive product list. The Commission
also proposes to create a new streamlined filing option for qualifying
NSAs called Standardized Distinct Products. Each streamlined option
would have distinct filing and review procedures providing different
levels of scrutiny and streamlined review. The intent is to preserve
the Postal Service's existing contracting flexibility with default
review procedures, while providing the option for streamlined pre-
implementation review of NSAs that satisfy the eligibility requirements
of one of the optional streamlined methods.
The Commission's proposal provides new filing and review procedures
for Standardized Distinct Product NSAs. These procedures would include
advance review of financial models to streamline review of individual
NSAs that are based on existing Postal Service competitive products.
Proposing new Non-Published Rate Products also would involve advance
review of financial models. By contrast, filing and review procedures
for Umbrella Products would generally follow current practices. Default
filing and review procedures would consist of current, generally
applicable filing and review practices for Competitive NSAs (other than
Umbrella Product or Non-Published Rate Product NSAs).
The Commission also proposes rules for administering NSAs on the
Competitive product list. These proposed rules cover amendments,
renewals, extensions, and terminations of Competitive NSAs, as well as
periodic reporting requirements.
The Commission's proposal is designed to streamline Competitive NSA
review, while ensuring transparency and accountability, preserving
existing flexibility, and enabling a smooth transition with minimum
disruption for stakeholders. Under the Commission's proposal, the vast
majority of proposed Competitive NSAs should qualify for a streamlined
review procedure. Use of such streamlined procedures, particularly the
Standardized Distinct Product option, should markedly simplify adding
new NSAs to the Competitive product list.
III. Proposed Rules
List of Subjects
39 CFR Part 3000
Organization and functions, Seals and insignia.
39 CFR Part 3010
Administrative practice and procedure, Confidential business
information, Freedom of information, Sunshine Act.
39 CFR Part 3040
Administrative practice and procedure, Foreign relations, Postal
service.
39 CFR Part 3041
Administrative practice and procedure, Postal service, Reporting
and recordkeeping requirements.
For the reasons stated in the preamble, the Commission proposes to
amend chapter III of title 39 of the Code of the Federal Regulations as
follows:
PART 3000--THE COMMISSION AND ITS OFFICES
0
1. The authority citation for part 3000 continues to read as follows:
Authority: 39 U.S.C. 503; 5 U.S.C. 552.
0
2. Amend Sec. 3000.114 by revising paragraph (a) to read as follows:
Sec. 3000.114 The Public Representative.
(a) Pursuant to 39 U.S.C. 505, the Commission appoints a staff
member, on a case-by-case basis, to serve as a representative of the
general public's interests in public proceedings before the Commission;
pursuant to 39 U.S.C. 3653, 39 U.S.C. 3661, and 39 U.S.C. 3662, and 39
U.S.C. 3705, the Commission also appoints a staff member, on a case-by-
case basis, to serve as a representative of the general public's
interests in certain proceedings; and, pursuant to 39 U.S.C. 504(a),
the Chairman may appoint a staff member, on a case-by-case basis, to
serve as a representative of the general public's interests in other
proceedings before the Commission. In all such proceedings, the
appointee is called the Public Representative.
* * * * *
PART 3010--RULES OF PRACTICE AND PROCEDURE
0
3. The authority citation for part 3010 continues to read as follows:
Authority: 39 U.S.C. 404(d); 503; 504; 3661.
Sec. 3010.101 Definitions.
0
4. Amend Sec. 3010.101 by:
0
a. Redesignating paragraphs (p) through (u) as paragraphs (q) through
(v);
0
b. Adding new paragraph (p); and
0
c. Revising newly redesignated paragraph (q).
The revision and addition read as follows:
Sec. 3010.101 Definitions
* * * * *
(p) Public proceeding means a proceeding developing rules,
[[Page 8379]]
regulations, and procedures or a proceeding materially affecting the
interests of the general public. A proceeding considering a request for
summary approval of a negotiated service agreement or of an amendment
to a negotiated service agreement is not a public proceeding. A
proceeding considering a request to amend a negotiated service
agreement for the sole purpose of extending the expiration date of the
negotiated service agreement is not a public proceeding.
(q) Public Representative or PR means an officer of the Commission
designated to represent the interests of the general public:
(1) In a public proceeding;
(2) With respect to any one of the following:
(i) The Commission's annual determination of compliance;
(ii) A request for an advisory opinion on a change in the nature of
postal services which will generally affect service on a nationwide or
substantially nationwide basis,
(iii) A rate or service complaint; or
(iv) Appeal of a Postal Service determination to close or
consolidate a post office; or
(3) As appointed by the Chairman.
* * * * *
Sec. 3010.102 Commission dockets.
0
5. Amend Sec. 3010.102 by:
0
a. Redesignating paragraphs (d)(1)(vii) through (xiv) as paragraphs
(d)(1)(viii) through (xv); and
0
b. Adding new paragraph (d)(1)(vii).
The addition read as follows:
Sec. 3010.102 Commission dockets
* * * * *
(d)(1) * * *
(vii) Competitive Negotiated Service Agreement (K);
* * * * *
0
6. Revise Sec. 3010.140 to read as follows:
Sec. 3010.140 Opportunity to comment.
Except for proceedings involving an appeal of a Postal Service
determination to close or consolidate a post office, any person may
submit comments in public proceedings before the Commission. An
opportunity to provide a reply to comments shall be at the discretion
of the Commission, or the presiding officer if one is appointed. The
scope and timing of comments and reply comments may be specified by
notice, order, or presiding officer's ruling. There is no requirement
to intervene in a proceeding as a party in order to submit comments.
0
7. Amend Sec. 3010.152 by revising paragraphs (a), (b)(5) and (b)(6)
to read as follows:
Sec. 3010.152 Notices initiating dockets for consideration of
negotiated service agreements.
(a) The Secretary shall issue a notice to initiate a docket for
each request that proposes the addition or removal of a negotiated
service agreement from the market dominant or the competitive product
list, or the modification of an existing product currently appearing on
the market dominant or the competitive product list. Multiple requests
may be combined into a single notice.
(b) * * *
(5) The appointment of an officer of the Commission to represent
the interests of the general public in the proceeding, unless the
proceeding is not a public proceeding.
(6) The comment deadline pertaining to each request, unless the
proceeding is not a public proceeding.
* * * * *
0
8. Amend Sec. 3010.200 by revising paragraph (b) to read as follows:
Sec. 3010.200 Applicability.
* * * * *
(b) Unless the Commission orders otherwise, the rules in this
subpart shall not apply to proceedings governed by subpart F of this
part (Proceedings with an Opportunity for a Hearing on the Record). The
rules in this subpart also shall not apply to the following parts of
subchapter D of chapter III (Special Rules of Practice for Specific
Proceeding Types) of this title: part 3020 (Rules Applicable to
Requests for Changes in the Nature of Postal Services) of this chapter,
part 3021 (Rules for Appeals of Postal Service Determinations to Close
or Consolidate Post Offices) of this chapter, part 3022 (Rules for
Complaints) of this chapter, part 3023 (Rules for Rate or Service
Inquiries) of this chapter, and part 3024 (Special Rules for Complaints
Alleging Violations of 39 U.S.C. 404a) of this chapter. The rules in
this subpart shall not apply to any proceeding governed by Sec.
3041.325, Sec. 3041.505(f), and Sec. 3041.505(g) (Competitive
Negotiated Service Agreements) of this chapter.
PART 3040--PRODUCT LISTS AND THE MAIL CLASSIFICATION SCHEDULE
0
9. The authority citation for part 3040 continues to read as follows:
Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.
0
10. Amend Sec. 3040.101 by adding paragraph (e) to read as follows:
Sec. 3040.101 Applicability.
* * * * *
(e) Modification of the competitive product list to add a
competitive negotiated service agreement is not governed by this part
but is governed by part 3041 of this chapter. The rules in part 3041 of
this chapter regarding removal of a negotiated service agreement from
the competitive product list supersede any conflicting rules in this
part.
PART 3041--COMPETITIVE NEGOTIATED SERVICE AGREEMENTS
0
11. Add part 3041 to read as follows:
PART 3041--COMPETITIVE NEGOTIATED SERVICE AGREEMENTS
Subpart A--General
Sec.
3041.105 General.
3041.110 Definitions.
Subpart B--Advance Review
Sec.
3041.205 Advance review of non-published rates products and
standardized distinct products.
Subpart C--Adding Negotiated Service Agreements to the Competitive
Product List
Sec.
3041.305 Applicability.
3041.310 General procedures and filing requirements.
3041.315 Procedures and filing requirements for umbrella products.
3041.320 Procedures and filing requirements for non-published rates
negotiated service agreements.
3041.325 Procedures and filing requirements for standard distinct
product negotiated service agreements.
Subpart D--Commission Review
Sec.
3041.405 Docket and notice.
3041.410 Required findings.
3041.415 Commission review and disposition of requests to add
negotiated service agreements to the competitive product list.
Subpart E--Negotiated Service Agreements on the Competitive Product
List
Sec.
3041.505 Amendments to competitive negotiated service agreements.
3041.510 Renewals of competitive negotiated service agreements.
3041.515 Extensions
3041.520 Terminations
Subpart F--Negotiated Service Agreement Reporting and Compliance
Sec.
3041.605 Competitive negotiated service agreement reporting
requirements.
Authority: 39 U.S.C. 503; 39 U.S.C. 3633
[[Page 8380]]
Subpart A--General
Sec. 3041.105 General.
(a) The rules in this part apply to competitive negotiated service
agreements.
(b) When a general rule conflicts with a rule governing a specific
streamlined option, the rule governing the specific streamlined option
shall take precedence.
(c) Commission findings that the addition of a competitive
negotiated service agreement to the competitive product list is not
inconsistent with the standards of 39 U.S.C. 3633 are provisional and
subject to subsequent review.
(d) The addition of a competitive negotiated service agreement to
the competitive product list is limited to the term of the negotiated
service agreement, as it may be extended. The Commission will remove a
negotiated service agreement from the competitive product list
automatically upon the expiration or termination of the negotiated
service agreement. Any request to remove a negotiated service agreement
from the competitive product list unrelated to expiration or
termination of the negotiated service agreement shall follow the
applicable procedures outlined in part 3040 of this chapter.
(e) When a rule in subpart E of this part conflicts with a
provision of a negotiated service agreement added to the competitive
product list before the effective date of this part, the provision of
the negotiated service agreement shall take precedence.
Sec. 3041.110 Definitions.
(a) Applicability. The definitions in paragraphs (b) through (q) of
this section apply to this part.
(b) Baseline agreement. A negotiated service agreement that serves
as a model for an included contract in an umbrella product.
(c) Contract template. A template for included contracts in a non-
published rates product.
(d) Financial model. A workbook showing detailed projected cost,
revenue, and volume data for a negotiated service agreement; containing
all supporting inputs and calculations; and identifying the sources of
all such inputs. A financial model must use accepted analytical
principles within the meaning of part 3050 of this chapter and accepted
quantification techniques within the meaning of part 3050 of this
chapter.
(e) Functionally equivalent negotiated service agreements.
Negotiated service agreements that have similar cost characteristics
and similar market characteristics.
(f) Included contract. A negotiated service agreement included as
part of an umbrella product or non-published rates product.
(g) Minimum rates. The set of lowest rates that could be offered
pursuant to the terms of a negotiated service agreement, or specified
in a financial model, for each rate cell.
(h) Negotiated service agreement. As defined in Sec. 3010.101(f)
of this chapter, a written contract, to be in effect for a defined
period of time, between the Postal Service and a mailer, which provides
for customer-specific rates or fees and/or terms of service in
accordance with the terms and conditions of the contract. A rate
associated with a negotiated service agreement is not a rate of general
applicability.
(i) Non-published rates product. A single product consisting of a
contract template and any included contracts that are functionally
equivalent to the contract template and use a single common financial
model.
(j) Notice information. Contact information specified in a
negotiated service agreement for one party to provide the other party
with notice in accordance with the terms of the negotiated service
agreement.
(k) Negotiated Service Agreement (NSA) summary proceeding. A
streamlined proceeding considering a Postal Service request to add to
the competitive product list a product for which use of a financial
model has been authorized in a streamlined-option rulemaking or a
Postal Service request to amend such a product. Such a proceeding is
not a public proceeding.
(l) Postal Service executive. The Postmaster General, the Deputy
Postmaster General, or a Postal Service vice president.
(m) Rate cell. Each and every separate rate identified in a
financial model or negotiated service agreement.
(n) Standardized distinct product. A negotiated service agreement
that is a variation of one or more competitive products offered as
rates of general applicability or added to the competitive product list
as rates not of general applicability.
(o) Streamlined option. An optional procedural approach to filing
requirements for a request to add a negotiated service agreement to the
competitive product list and to review of such negotiated service
agreement.
(p) Streamlined-option rulemaking. A rulemaking proceeding that
considers financial models, contract templates, and Mail Classification
Schedule changes in connection with a streamlined option.
(q) Umbrella product. A single product consisting of a baseline
agreement and one or more included contracts that are functionally
equivalent to the baseline agreement.
Subpart B--Advance Review
Sec. 3041.205 Advance review of non-published rates products and
standardized distinct products.
(a) The Commission reviews proposed financial models, minimum
rates, and Mail Classification Schedule changes in streamlined-option
rulemaking proceedings to permit streamlined review of non-published
rates products and standardized distinct products.
(b) Streamlined-option rulemaking proceedings follow the procedures
set forth in part 3010, subpart E of this chapter and the additional
procedures set forth in this section.
(c) In addition to providing the information required by Sec.
3010.201(b)(1) of this chapter, a petition for a streamlined-option
rulemaking must:
(1) Provide a proposed financial model containing:
(i) Minimum rates for all rate cells;
(ii) Projected volume for all rate cells;
(iii) Projected revenue at minimum rates;
(iv) Projected costs attributable;
(v) Projected coverage of costs attributable within the meaning of
39 U.S.C. 3633(a), expressed as a percentage; and
(vi) All input data, sources, and calculations used;
(2) Provide a narrative explanation of how the proposed financial
model complies with paragraph (d)(1) of this section;
(3) Explain why the projected cost, revenue, and volume data in the
proposed financial model are reasonable and reliable;
(4) Identify the existing competitive product(s) on which proposed
products will be based and the Commission order(s) in which such
existing competitive product(s) were determined to be competitive;
(5) Identify each way in which proposed products could differ from
the existing competitive product(s) identified in paragraph (c)(4) of
this section;
(6) Explain why the potential differences identified in paragraph
(c)(5) of this section do not cause any proposed products to satisfy
the definition of a market dominant product within the meaning of 39
U.S.C. 3642(b)(1); and
(7) Identify the Mail Classification Schedule section in which
proposed
[[Page 8381]]
products will be listed and provide any proposed changes therein in
legislative format.
(d) The financial model must:
(1) Demonstrate that each negotiated service agreement that will
use the minimum rates is not inconsistent with the standards of 39
U.S.C. 3633; and
(2) Rely on reasonable and reliable projected cost, revenue, and
volume data.
(e) The Mail Classification Schedule entry, including any proposed
changes, must:
(1) Identify all material differences between proposed products and
the exiting competitive product(s) on which proposed products are
based;
(2) Specify all options and features of proposed products included
in the financial model; and
(3) For proposed products based on an existing product with rates
not of general applicability, including a negotiated service agreement,
describe all material aspects of the proposed products, including the
information identified in Sec. 3040.104(b)(3)(ii)(A) of this chapter.
(f) The Commission will issue an order authorizing the proposed
financial model, minimum rates, and any Mail Classification Schedule
changes for use in requests to add standardized distinct products and
non-published rates products to the competitive product list if, after
review, the Commission finds that:
(1) The financial model and minimum rates are not inconsistent with
the standards of 39 U.S.C. 3633;
(2) The products using such proposed financial model, minimum
rates, and Mail Classification Schedule changes will be competitive
products; and
(3) The proposed Mail Classification Schedule changes comply with
the requirements of this section and are not inconsistent with the
proposed financial model.
(g) As a condition of any authorization issued pursuant to
paragraph (f) of this section, the Postal Service shall be required to
update the financial model whenever more accurate or complete cost,
revenue, or volume data are available and no less frequently than every
12 months from the date on which such authorization is granted. Upon
review of any updated financial model, the Commission may require
changes to any applicable minimum rates to ensure that the minimum
rates are not inconsistent with the standards of 39 U.S.C. 3633.
Subpart C--Adding Negotiated Service Agreements to the Competitive
Product List
Sec. 3041.305 Applicability.
(a) This subpart imposes requirements regarding the addition of
negotiated service agreements to the competitive product list. These
requirements are in addition to other requirements imposed by part 3035
of this chapter.
(b) The general requirements appearing in Sec. 3041.310 apply to a
request to add a negotiated service agreement to the competitive
product list unless the request is filed under one of the streamlined,
alternative options for competitive negotiated service agreement
consideration appearing in Sec. 3041.315, Sec. 3041.320, and Sec.
3041.325.
(c) Section 3041.320 is not applicable to any request to add an
included contract to a non-published rates product listed on the
competitive product list as of the effective date of this part. Any
such request is governed by the terms of the Commission order approving
the addition of such non-published rates contract to the competitive
product list.
Sec. 3041.310 General procedures and filing requirements.
(a) Except as otherwise provided in Sec. Sec. 3041.315, 3041.320,
and 3041.325 of this part, in order to add a negotiated service
agreement to the competitive product list, a request must be filed with
the Commission as provided in this section and Sec. 3035.105 of this
chapter.
(b) Each request to add a negotiated service agreement to the
competitive product list must include each of the following items:
(1) A copy of the negotiated service agreement;
(2) The rate and class decision of the Postal Service Board of
Governors under 39 U.S.C. 3632 relating to the proposed negotiated
service agreement and the record of the proceedings in connection with
such decision;
(3) A copy of the applicable sections of the Mail Classification
Schedule and the proposed changes therein in legislative format;
(4) The name, and class if applicable, of the proposed negotiated
service agreement;
(5) A description clearly explaining the operative components of
the negotiated service agreement;
(6) An explanation of the reason for initiating the docket and of
why the proposed negotiated service agreement is not inconsistent with
the applicable requirements of this part and any applicable Commission
directives and orders;
(7) An explanation of the reasons why the addition of the product
to the competitive product list will not result in a violation of the
standards of 39 U.S.C. 3633;
(8) Verification that the change does not classify as competitive a
product over which the Postal Service exercises sufficient market power
that it can, without risk of losing a significant level of business to
other firms offering similar products:
(i) Set the price of such product substantially above costs;
(ii) Raise prices significantly;
(iii) Decrease quality; or
(iv) Decrease output;
(9) Explanation of whether or not the proposed negotiated service
agreement is covered by the postal monopoly as reserved to the Postal
Service under 18 U.S.C. 1696 subject to the exceptions set forth in 39
U.S.C. 601;
(10) A description of the availability and nature of enterprises in
the private sector engaged in the delivery of the proposed negotiated
service agreement or substantially similar products;
(11) Any information available on the views of those who use, or
will use, the proposed negotiated service agreement on the
appropriateness of the proposed negotiated service agreement;
(12) A description of the likely impact of the proposed negotiated
service agreement on small business concerns;
(13) The information required by Sec. 3035.105(a) of this chapter;
(14) The information required by Sec. 3035.105(b) of this chapter;
(15) The information required by Sec. 3035.105(c) of this chapter;
(16) All other supporting justification upon which the Postal
Service proposes to rely; and
(17) Such other information and data, and such statements of
reasons and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed negotiated service agreement.
(c) In order to authorize the addition of a negotiated service
agreement to the competitive product list, the Commission must:
(1) Give due regard to:
(i) The availability and nature of enterprises in the private
sector engaged in the delivery of the proposed product;
(ii) The views of those who will use the proposed product on the
appropriateness of adding the proposed product to the competitive
product list; and
(iii) The likely impact of adding the proposed product to the
competitive product list on small business concerns; and
[[Page 8382]]
(2) Make the following findings:
(i) The proposed negotiated service agreement is a competitive
product; and
(ii) The proposed negotiated service agreement is not inconsistent
with the standards of 39 U.S.C. 3633.
Sec. 3041.315 Procedures and filing requirements for umbrella
products.
(a) The procedures described in this section and in Sec.
3035.105(a) of this chapter apply to requests to add an included
contract to an umbrella product or to create an umbrella product by
adding an included contract to an existing baseline agreement. Requests
to add a new negotiated service agreement to the competitive product
list for use as a baseline agreement must instead follow the
requirements of Sec. 3041.310.
(b) Any of the following negotiated service agreements may function
as a baseline agreement:
(1) An active negotiated service agreement, other than an included
contract in a non-published rates product, listed on the competitive
product list as of the effective date of this part.
(2) An active negotiated service agreement added to the competitive
product list following a request pursuant to Sec. 3041.310.
(3) An expired or terminated negotiated service agreement, other
than an included contract in a non-published rates product or a
standardized distinct product, that the Commission authorized to serve
as a baseline agreement before its expiration or termination.
(c) Only the Postal Service is permitted to propose to add an
included contract to an umbrella product.
(d) A proposal to add an included contract to an umbrella product
must include:
(1) A copy of the proposed included contract;
(2) The rate and class decision of the Postal Service Board of
Governors under 39 U.S.C. 3632 relating to the proposed included
contract and the record of the proceedings in connection with such
decision;
(3) A statement identifying the applicable baseline agreement;
(4) A copy of the applicable sections of the Mail Classification
Schedule and the proposed addition thereto in legislative format;
(5) A description clearly explaining the operative components of
the included contract;
(6) An explanation of the reason for initiating the docket and of
why the proposed negotiated service agreement is not inconsistent with
the applicable requirements of this part and any applicable Commission
directives and orders;
(7) An explanation of the reasons why the addition of the included
contract to the umbrella product will not result in a violation of the
standards of 39 U.S.C. 3633;
(8) A demonstration that the proposed included contract is
functionally equivalent to the baseline agreement;
(9) The information required by Sec. 3035.105(a) of this chapter;
(10) The information required by Sec. 3035.105(b) of this chapter;
(11) The information required by Sec. 3035.105(c) of this chapter;
(12) All other supporting justification upon which the Postal
Service proposes to rely; and
(13) Such other information and data, and such statements of
reasons and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed included contract.
(e) In order to authorize the addition of an included contract to
an umbrella product, the Commission must make the following findings:
(1) The proposed included contract is functionally equivalent to
the baseline agreement; and
(2) With the addition of the proposed included contract, the
umbrella product is not inconsistent with the standards of 39 U.S.C.
3633.
Sec. 3041.320 Procedures and filing requirements for non-published
rates negotiated service agreements.
(a) A request to add a non-published rates product to the
competitive product list must comply with the requirements of this
section and the requirements of Sec. 3035.105(a) of this chapter.
(b) A non-published rates product contract template may be proposed
at any time during or following the pendency of a streamlined-option
rulemaking considering a proposed financial model, minimum rates, and
Mail Classification Schedule changes for standardized distinct products
and non-published rates products.
(c) A non-published rates product is added to the competitive
product list after:
(1) Issuance of a Commission order authorizing the use of an
applicable financial model, minimum rates, and Mail Classification
Schedule changes in a streamlined-option rulemaking; and
(2) Issuance of a Commission order approving the non-published
rates product contract template.
(d) A non-published rates product financial model, minimum rates,
and Mail Classification Schedule changes must be, or have been,
proposed in a streamlined-option rulemaking proceeding.
(e) A proposal for a non-published rates product contract template
must include the following information:
(1) The proposed non-published rates product contract template;
(2) The rate and class decision of the Postal Service Board of
Governors under 39 U.S.C. 3632 relating to the proposed non-published
rates product contract template and the record of the proceedings in
connection with such decision;
(3) A copy of the applicable sections of the Mail Classification
Schedule and the proposed addition therein in legislative format;
(4) The number of the Commission order approving the use of the
financial model associated with the proposed non-published rates
product contract template or the number of the docket in which the
financial model associated with the proposed non-published rates
product contract template is being considered;
(5) A description clearly explaining the operative components of
the non-published rates product contract template;
(6) A description of the availability and nature of enterprises in
the private sector engaged in the delivery of the postal services
involved in the proposed non-published rates product contract template;
(7) A description of the views of those who will use the postal
services involved in the proposed non-published rates product contract
template on the appropriateness of the proposed non-published rates
product contract template;
(8) A description of the likely impact of the proposed non-
published rates product contract template on small business concerns;
(9) In lieu of the certified statement required by Sec.
3035.105(c)(2) of this chapter, a sworn statement of a Postal Service
executive certifying that the proposed non-published rates product
template is not inconsistent with the financial model approved, or
under consideration by the Commission, in the order or docket
identified in paragraph (e)(4) of this section;
(10) All other supporting justification upon which the Postal
Service proposes to rely; and
(11) Such other information and data, and such statements of
reasons and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed non-published rates product contract template.
[[Page 8383]]
(f) A non-published rates product contract template may include
optional provisions to be selected by customers, provided that:
(1) The addition of any optional provision in any included contract
will not be inconsistent with the standards of 39 U.S.C. 3633;
(2) The addition of any optional provision in any included contract
represents a minor change to the included contract; and
(3) Each included contract that could be derived from the contract
template is functionally equivalent to every other included contract
that could be derived from the contract template.
(g) In order to authorize the addition of a non-published rates
product to the competitive product list, the Commission must:
(1) Give due regard to:
(i) The availability and nature of enterprises in the private
sector engaged in the delivery of the proposed product;
(ii) The views of those who will use the proposed product on the
appropriateness of adding the proposed product to the competitive
product list; and
(iii) The likely impact of adding the proposed product to the
competitive product list on small business concerns; and
(2) Make the following findings:
(i) The proposed non-published rates product is a competitive
product; and
(ii) The proposed non-published rates product contract template is
not inconsistent with the standards of 39 U.S.C. 3633.
(h) After a non-published rates product has been approved, the
Postal Service may add one or more included contracts to the product
without filing a request or otherwise obtaining further approval from
the Commission, provided that:
(1) The included contract does not deviate in any way from the non-
published rates product contract template;
(2) No rate in any included contract is less than the corresponding
minimum rate authorized in the associated streamlined-option
rulemaking;
(3) The included contract bears a unique serial number; and
(4) Within 10 days after the effective date of each included
contract, the Postal Service:
(i) Notifies the Commission of the effective date and scheduled
expiration date of the included contract; and
(ii) Files a version of the applicable financial model updated to
include all projected cost, revenue, and volume data specific to the
included contract.
(i) Only the Postal Service is permitted to add an included
contract to a non-published rates product.
(j) If any included contract is terminated before its scheduled
expiration date, the Postal Service must inform the Commission within 7
days after such termination.
(k) If the Commission finds that the Postal Service has failed to
comply with any requirements of paragraphs (h) or (j) of this section,
the Commission may take any of the following actions:
(1) Require the Postal Service to request Commission approval in
accordance with such terms as the Commission may specify by order, and
obtain such approval, before adding any additional included contracts
to non-published rates products; or
(2) Take other appropriate remedial action.
Sec. 3041.325 Procedures and filing requirements for standard
distinct product negotiated service agreements.
(a) A request to add a standardized distinct product to the
competitive product list must comply with the requirements of this
section and the requirements of Sec. 3035.105(a) of this chapter.
(b) A standardized distinct product may be proposed at any time
during or following the pendency of a streamlined-option rulemaking
proceeding considering a proposed financial model, minimum rates, and
Mail Classification Schedule changes for standardized distinct products
and non-published rates products.
(c) A standardized distinct product is added to the competitive
product list after:
(1) Issuance of a Commission order authorizing the use of an
applicable proposed financial model, minimum rates, and Mail
Classification Schedule changes in a streamlined-option rulemaking; and
(2) Issuance of a Commission order approving the addition of the
standardized distinct product to the competitive product list in an NSA
summary proceeding.
(d) In each NSA summary proceeding, the Postal Service shall
submit:
(1) A copy of the negotiated service agreement;
(2) The rate and class decision of the Postal Service Board of
Governors under 39 U.S.C. 3632 relating to the proposed negotiated
service agreement and the record of the proceedings in connection with
such decision;
(3) A copy of the applicable sections of the Mail Classification
Schedule and the proposed addition therein in legislative format;
(4) The number of the Commission order resolving the streamlined-
option rulemaking proceeding applicable to the proposed negotiated
service agreement;
(5) The planned effective date(s) of the planned rates.
(6) A description clearly explaining the operative components of
the negotiated service agreement;
(7) An explanation of the reason for initiating the docket and of
why the proposed standardized distinct product is not inconsistent with
the applicable requirements of this part and any applicable Commission
directives and orders;
(8) An explanation of the reasons why the addition of the
standardized distinct product to the competitive product list will not
result in a violation of the standards of 39 U.S.C. 3633;
(9) A description of the availability and nature of enterprises in
the private sector engaged in the delivery of the postal services that
are the subject of the proposed standardized distinct product;
(10) Any information available on the views of those who use, or
will use, the proposed standardized distinct product on the
appropriateness of the proposed standardized distinct product;
(11) A description of the likely impact of the proposed
standardized distinct product on small business concerns;
(12) In lieu of the certified statement required by Sec.
3035(c)(2) of this chapter, a sworn statement of a Postal Service
executive certifying that the proposed standardized distinct product is
not inconsistent with the financial model authorized for use in the
applicable Commission order identified in paragraph (e)(4) of this
section;
(13) In lieu of the revenue and cost data required by Sec.
3035.105(c)(1) of this chapter, a version of the applicable financial
model updated to include all projected cost, revenue, and volume data
specific to the proposed product;
(14) All other supporting justification upon which the Postal
Service proposes to rely; and
(15) Such other information and data, and such statements of
reasons and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed standardized distinct product.
(e) Only the Postal Service is permitted to propose to add a
standardized distinct product to the competitive product list.
(f) In order to authorize the addition of a standardized distinct
product to the competitive product list, the Commission must:
(1) Give due regard to:
[[Page 8384]]
(i) The availability and nature of enterprises in the private
sector engaged in the delivery of the proposed product;
(ii) The views of those who will use the proposed product on the
appropriateness of adding the proposed product to the competitive
product list; and
(iii) The likely impact of adding the proposed product to the
competitive product list on small business concerns; and
(2) Make the following findings:
(i) The proposed standardized distinct product is a competitive
product; and
(ii) The proposed standardized distinct product is not inconsistent
with the standards of 39 U.S.C. 3633.
Subpart D--Commission Review
Sec. 3041.405 Docket and notice.
(a) The Commission will issue a notice establishing a docket for
each request to add a negotiated service agreement to the competitive
product list under this part. The Commission will also issue notice
upon receiving a request complying with the requirements of Sec.
3041.505(b) to amend an existing negotiated service agreement. Notices
issued pursuant to this paragraph will include:
(1) The general nature of the proceeding;
(2) A reference to the legal authority pursuant to which the
proceeding is to be conducted;
(3) A concise description of the proposal;
(4) If applicable, the identification of an officer of the
Commission to represent the interests of the general public in the
docket;
(5) If applicable, a specified period for public comment; and
(6) Such other information as the Commission deems appropriate.
(b) The Commission will post the notice on its website. The
Commission will promptly publish the notice in the Federal Register.
(c) In the case of a request to add a standardized distinct product
to the competitive product list or to amend a standardized distinct
product, an officer of the Commission to represent the interests of the
general public will not be appointed in the docket.
(d) In the case of a request to add a standardized distinct product
to the competitive product list or to amend a standardized distinct
product, public comment will not be requested in the docket.
Sec. 3041.410 Required findings.
(a) In order to authorize the addition of a negotiated service
agreement to the competitive product list, the Commission must make the
findings specified in Sec. 3041.310, except as provided in Sec.
3041.315, Sec. 3041.320, and Sec. 3041.325.
(b) [Reserved].
Sec. 3041.415 Commission review and disposition of requests to add
negotiated service agreements to the competitive product list.
(a) The Commission will review each request to add a negotiated
service agreement to the competitive product list and any responsive
comments, except as set forth in Sec. 3041.320 regarding non-published
rates product included contracts. The Commission will either:
(1) Grant the request upon making the required findings;
(2) Grant the request upon making the required findings with such
conditions as the Commission may consider appropriate;
(3) Deny the request; or
(4) Direct other action as the Commission may consider appropriate.
(b) Each grant of a request under paragraph (a)(1) or (a)(2) of
this section is conditional upon the submission of accurate information
in support of the request. Any such grant may be revoked if the
Commission finds that any of the information submitted with the request
contained a material misrepresentation.
Subpart E--Negotiated Service Agreements on the Competitive Product
List
Sec. 3041.505 Amendments to competitive negotiated service
agreements.
(a) Except as provided in paragraph (c) of this section, an
amendment to an existing negotiated service agreement is not effective
until the Commission has approved the amendment. In order to approve an
amendment to an existing negotiated service agreement the Commission
must find that the negotiated service agreement, as amended by the
proposed amendment, is not inconsistent with the standards of 39 U.S.C.
3633.
(b) A request to amend a negotiated service agreement must include:
(1) A copy of the amendment;
(2) The planned effective date(s) of the amendment;
(3) A statement explaining the operative components of the
amendment; and
(4) If the amendment changes any rates in the negotiated service
agreement,
(i) The information required by 39 CFR 3035.105(a) of this chapter;
(ii) The information required by 39 CFR 3035.105(b) of this
chapter; and
(iii) The information required by 39 CFR 3035.105(c) of this
chapter, except that, for a request to amend a standardized distinct
product, a copy of the applicable financial model updated to include
all projected cost, revenue, and volume data specific to the product,
as amended by the proposed amendment, must be provided.
(5) All other supporting justification upon which the Postal
Service proposes to rely; and
(6) Such other information and data, and such statements of reasons
and bases, as are necessary and appropriate to fully inform the
Commission of the nature, scope, significance, and impact of the
proposed amendment.
(c) An amendment to an existing negotiated service agreement may
take effect upon filing with the Commission without Commission approval
if each of the following requirements is satisfied:
(1) The Postal Service submits a notice to the Commission
containing:
(i) A copy of the amendment;
(ii) The planned effective date(s) of the amendment;
(iii) A statement explaining the operative components of the
amendment; and
(iv) A sworn statement from a Postal Service executive attesting
that the amendment modifies the existing negotiated service agreement
only in one or more of the ways specified in paragraphs (c)(2), (e)(2),
or (f)(2) of this section; and
(2) The amendment modifies the existing negotiated service
agreement only in one or more of the following ways:
(i) Changing the customer's name to recognize a change to the legal
name of the customer;
(ii) Changing the customer's address;
(iii) Changing the name of any individual identified in the
contract;
(iv) Changing notice information;
(v) Increasing any rates, prices, fees, or charges in the
negotiated service agreement;
(d) Special rules regarding amending umbrella products.
(1) A baseline agreement shall not be amended, except to:
(i) Change the customer's name to recognize a change to the legal
name of the customer;
(ii) Change the customer's address;
(iii) Change the name of any individual identified in the contract;
(iv) Change notice information;
(v) Extend the term of the baseline agreement in accordance with
Sec. 3041.515; or
(vi) Make rate changes not inconsistent with the standards of 39
U.S.C. 3633.
[[Page 8385]]
(2) An included contract in an umbrella product shall not be
amended, unless the amendment remains functionally equivalent to the
baseline agreement.
(e) Special rules regarding non-published rates products.
(1) A non-published rates contract template shall not be amended.
(2) An included contract in a non-published rates product shall not
be amended, except to:
(i) Change the customer's name to recognize a change to the legal
name of the customer;
(ii) Change the customer's address;
(iii) Change the name of any individual identified in the contract;
(iv) Change notice information;
(v) Make rate changes provided that the rates to be charged equal
or exceed the current minimum rates approved by the Commission in the
applicable streamlined-option rulemaking;
(vi) Extend the included contract's expiration date provided that
the rates to be charged equal or exceed the current minimum rates
approved by the Commission in the applicable streamlined-option
rulemaking;
(vii) Select an alternative optional provision available in the
contract template.
(3) An amendment to an existing included contract will take effect
without Commission further approval upon filing with the Commission of
the notice specified in paragraph (c)(1) of this section.
(f) Special rules regarding standardized distinct products.
(1) A request to amend a standardized distinct product is reviewed
in an NSA summary proceeding.
(2) An amendment to an existing standardized distinct product may
take effect upon filing with the Commission without Commission approval
if:
(i) The Postal Service files the notice specified in paragraph
(c)(1) of this section; and
(ii) The amendment modifies the existing standardized distinct
product in one or more of the following ways:
(A) Changing the customer's name to recognize a change to the legal
name of the customer;
(B) Changing the customer's address;
(C) Changing the name of any individual identified in the contract;
(D) Changing notice information;
(E) Extending the standardized distinct product's expiration date
provided that the rates to be charged equal or exceed the current
minimum rates approved by the Commission in the applicable streamlined-
option rulemaking; or
(F) Implementing changes to rates provided that such changed rates
equal or exceed the current minimum rates approved by the Commission in
the applicable streamlined-option rulemaking.
(g) Special rules regarding a request to amend a negotiated service
agreement to extend the expiration date of the negotiated service
agreement.
1. A request to amend a negotiated service agreement to extend the
expiration date of the negotiated service agreement must be submitted
in accordance with Sec. 3041.515.
2. A proceeding considering a request to amend a negotiated service
agreement to extend the expiration date of the negotiated service
agreement is not a public proceeding.
(h) When a general rule conflicts with a special rule in this
section, the special rule shall take precedence.
Sec. 3041.510 Renewals of competitive negotiated service agreements.
(a) A renewal of a negotiated service agreement is deemed a new
negotiated service agreement.
(b) A renewal of a competitive negotiated service agreement will be
added to the competitive product list pursuant to the applicable rules
for adding a new negotiated service agreement to the competitive
product list.
Sec. 3041.515 Extensions
(a) A negotiated service agreement may be extended prior to its
expiration date upon one of the following:
1. Timely filing of notice with the Commission of the valid
exercise of an extension right in the negotiated service agreement; or
2. Approval by the Commission of a timely filed amendment extending
the expiration date of the negotiated service agreement.
(b) For the purposes of paragraph (a) of this section, a notice or
amendment is timely filed if it is filed at least 10 days prior to the
expiration of the negotiated service agreement.
(c) Upon expiration, a negotiated service agreement shall be
removed automatically from the competitive product list.
(d) No negotiated service agreement shall remain on the competitive
product list following its expiration. An expired negotiated service
agreement shall not be extended retroactively.
(e) Notwithstanding any other rule in this chapter, the
prohibitions in paragraph (d) of this section shall not be waived.
Sec. 3041.520 Terminations
(a) The Postal Service shall file notice of the termination of a
negotiated service agreement within 7 days after such termination.
(b) Upon termination, a negotiated service agreement shall be
removed automatically from the competitive product list. No negotiated
service agreement shall remain on the competitive product list after
its termination.
Subpart F--Negotiated Service Agreement Reporting and Compliance
Sec. 3041.605 Competitive negotiated service agreement reporting
requirements.
(a) The Postal Service must file, on a quarterly basis, a summary
spreadsheet listing all negotiated service agreements active during any
part of the prior quarter. Negotiated service agreements must be listed
by Mail Classification Schedule section or in such other way as the
Commission requires by order. Such spreadsheet must identify all
extensions, expirations, and terminations of negotiated service
agreements and any other information the Commission requires by order.
(b) A report is due within 7 days after the last day of each
quarter of the fiscal year.
(c) Upon finding that any report contains significant omissions,
inaccuracies, or other deficiencies, the Commission may take any of the
following actions:
1. Require the Postal Service to file such reports on a more
frequent basis;
2. Require a Postal Service executive to submit a sworn statement
attesting to the accuracy and completeness of each subsequent report;
and
3. Impose other conditions the Commission finds reasonable and
appropriate to ensure the accuracy and completeness of such reports.
By the Commission.
Jennie Jbara,
Alternate Certifying Officer.
[FR Doc. 2024-02281 Filed 2-6-24; 8:45 am]
BILLING CODE 7710-FW-P