[Federal Register Volume 62, Number 60 (Friday, March 28, 1997)]
[Proposed Rules]
[Pages 14833-14843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7861]
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POSTAL SERVICE
39 CFR Parts 111 and 502
Manufacture, Distribution, and Use of Postal Security Devices and
Information Based Indicia
AGENCY: Postal Service.
ACTION: Proposed rule.
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SUMMARY: This proposal would add new sections to the Domestic Mail
Manual (DMM) and title 39, Code of Federal Regulations (CFR), to
reflect policies and regulations pertaining to the Information Based
Indicia Program (IBIP). The proposal supports the IBIP technical
specifications published on July 2, 1996, in the Federal Register (61
FR 34460). The standards and regulations for the products/devices are
in some ways similar to those for postage meters but are to be
contained in separate parts of the DMM and the CFR. The DMM pertains to
customer requirements and product/service provider support of those
customers, whereas the CFR contains requirements such as authorization
to manufacture and distribute, product testing and approval, security
standards, and financial arrangements.
DATES: Comments must be received on or before April 28, 1997.
ADDRESSES: Written comments should be mailed or delivered to the
Manager, Retail Systems and Equipment, Room 8430, 475 L'Enfant Plaza
SW, Washington, DC 20260-6807. Copies of all written comments will be
available at the above address for inspection and photocopying between
9 a.m. and 4 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT:
Nicholas S. Stankosky, (202) 268-5311.
SUPPLEMENTARY INFORMATION: The Information Based Indicia Program (IBIP)
involves the development of new technology to produce forms of postage
evidencing through the use of two-dimensional barcodes and
cryptographic services to produce postage from personal computers. This
technology will support Postal Service efforts to reduce fraud and the
potential for misuse associated with current mechanical postage meters.
In addition, IBIP provides a convenient access to postage and an
opportunity for customer defined ``value added'' services.
There are five primary elements to IBIP. The indicia includes:
Town circle information.
Postage amount applied.
Device identifier.
2 dimensional bar code.
Optional advertising art.
The postal security device (PSD) performs core security functions
such as digital signature generation and verification and the
management of registers. The host system controls the customers
infrastructure in device authorization, device audit, postage resetting
and, together with the PSD, produces the indicia.
The key management component employs a public-key certificate based
digital signature that features a data integrity service and provides
the means to validate the indicium. Finally, the product/service
provider infrastructure provides support for all IBIP functions
including licensing, PSD production and life cycle support, and
provides an interface with both the customer and the Postal Service
infrastructure. The Postal Service interface involves the issuance of
licenses, updating licensee information, product/device inventory and
tracking, resetting support and account reconciliation, lost and
stolen/irregularity monitoring, and the assignment of digital
certificates.
In this proposal, the Postal Service has taken into consideration
and evaluated applicable comments received as a result of the July 2
Federal Register notice, the July 19 public meeting on technical
specifications, and the September 25 public meeting on policy and
regulations. The following is a summary of the Postal Service's
position on the general interest IBIP policy issues:
Any proposed product or device must be submitted for
approval under proposed draft IBIP interim product submission
procedures (Jan 8, 1997 Federal Register). These procedures include
specifics on letters of intent, nondisclosure agreements, the product/
service provider's concept of operations and infrastructure,
documentation requirements, product submissions, and most testing
activities.
In an attempt to use the existing Postal Service
infrastructure as much as possible, customer licensing and product/
device tracking will be included in the Centralized Meter Licensing
System currently under development. A license must be obtained prior to
the initialization or use of a device. A customer already licensed to
use postage meters will not have to apply again for an additional
license. The Postal Service will simply update the customer's file.
The terms ``manufacturer'' and ``vendor'' are no longer
referenced in IBIP. These have been replaced by the more appropriate
term ``product/service provider'', also known simply as ``Provider.''
The PSD must be leased by the product/service provider but
customers may purchase the software under two circumstances. The first
is in an open system where the PSD operates independently of the
software. The second is in a closed system where the meter is rendered
nonfunctional for printing postage without the PSD. The Postal Service
will not offer PSDs to customers.
Until the Postal Service has captured historical data on
reliability and security, the total amount of postage in a descending
register will be limited to $500. Ascending registers must show all
postage printed over time.
[[Page 14834]]
Authorized product/service providers must keep records of
the distribution, control, and maintenance of all products/devices
throughout the complete lifecycle of the product. This includes
tracking of newly manufactured PSDs, active leased PSDs and inactive
unleased PSDs. Tracking of a PSD must begin as soon as the PSD is
initialized with the key.
Indicia produced from the IBIP Open and Closed Systems may
be used to indicate postage for First-Class, Express and Standard Mail
classes. Indicia produced from the IBIP Closed System also may be used
on International Mail. Mail bearing the indicia is entitled to all
privileges and subject to all conditions applying to the various
classes of mail.
Product/service providers are responsible for audit
functions. The Postal Service will not take over this function but may
at times participate in the audit process. PSDs must be audited at
least once every 3 months in conjunction with remote settings and
resetting of the watch-dog timer.
Product/service providers must perform an analysis of each
submitted customer mailpiece as part of the Provider's Mailpiece
Quality Assurance program to ensure the quality and readability of the
indicia. The provider must notify the customer and the Postal Service
of any deficiencies.
All postage downloads or settings will be made under the
provisions of the Computerized Remote Meter Resetting System (CMRS).
The Postal Service will conduct periodic audits of a product/service
provider's resetting system to ensure that the system is operating
correctly and that postal revenues are protected.
Physical inspections of PSDs will be made at the time of
submission for approval and if there is suspicion of a security
problem.
The Postal Service will provide refunds for any balance
remaining on a PSD. The licensee will be required to submit a written
refund request to the Provider, along with the affected PSD and
supporting documentation such as an electronic daily activity report.
All approved systems must have the capability to update
postage rates efficiently when such changes are announced.
There are provisions in the IBIP regulations for the
correction of postage and dates. These are similar to those used for
metered postage. For date correction, the facing identification mark
(FIM) and barcode will be suppressed; for postage correction, the FIM
will be suppressed.
Cautionary labels such as those affixed to postage meters
will not be affixed to PSDs. However, providers should make their
customers aware of this information through their supplied software.
List of Subjects in 39 CFR Part 111
Administrative practice and procedure, Postal Service.
Although exempt from the notice and comment requirements of the
Administrative Procedure Act (5 U.S.C. 553 (b), (c)) regarding proposed
rulemaking by 39 U.S.C. 410(a), the Postal Service invites public
comments on the following proposed amendments to the Domestic Mail
Manual, incorporated by reference in the Code of Federal Regulations.
See 39 CFR part 111.
PART 111--[AMENDED]
1. The authority citation for 39 CFR part 111 continues to read as
follows:
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001-
3011, 3201-3219, 3403-3406, 3621, 3626, 5001.
2. Add the following sections to the Domestic Mail Manual as set
forth below:
P050 Information Based Indicia
1.0 BASIC INFORMATION
1.1 Description of Product/Device
The Product/Device prints an authorized USPS Information Based
Indicia that shows evidence of postage. The indicia consists of a USPS-
approved two-dimensional barcode and certain human-readable information
such as city and state, 5-digit ZIP Code of licensing post office,
Device ID number, date, and amount of postage. The Product/Device
includes as a primary component a postal security device (PSD) that
provides critical functionality for accounting postage with a computer-
based (open system) or postage meter-based (closed system) host system.
The PSD and host system interact to generate the indicia. The Product/
Device is remotely set and requires the customer to have funds on
deposit with the USPS before initial setting or resetting.
1.2 Product/Service Device Providers
The Product/Device is available only through a lease agreement from
a USPS authorized Product/Service Provider (hereafter referred to as
Provider). The open host system is envisioned to operate on personal
computers. The licensee can purchase the software if the PSD component
operates independently of the software. For a closed system, the
customer can purchase the software if it is rendered nonfunctional for
printing postage without the PSD. The USPS holds Providers responsible
for the life cycle, control, operation, maintenance, and replacement of
their Products/Devices.
1.3 Possession
A customer must have a USPS-issued Product/Device Postage Meter
License (Form 3601-B) to use the PSD component.
1.4 Classes of Mail
Indicia produced from the IBIP Open and Closed System may be used
to indicate postage for First-Class, Express and Standard Mail classes.
Additionally, indicia produced from the IBIP Closed System may be used
for International mail. Mail bearing the indicia is entitled to all
privileges and subject to all conditions applying to the various
classes of mail.
1.5 Amount of Postage
The value of the Product/Device indicia affixed to each mailpiece
must be the exact amount due for the piece when mailed.
1.6 Additional Postage
An indicia showing additional postage may be placed on a shortpaid
mailpiece under 4.9, Postage Correction.
2.0 LICENSE
2.1 Procedures
The application and the license are processed through the
Centralized Meter Licensing System (CMLS). An applicant wanting to
lease and use a Product/Device must provide all applicable data on the
Form 3601-A, Application for a License to Lease and Use Postage Meters,
to the Provider. The application must state the post office where the
applicant intends to deposit mail produced using their Product/Device.
The Provider electronically transmits the information requested on Form
3601-A to CMLS in the USPS-specified format. When a Provider transmits
the application on behalf of the applicant, the USPS notifies the
Provider when a license is issued. A single license covers all
Products/Devices to the same applicant by the same post office, but a
separate application must be submitted for each post office where the
applicant wants to deposit Product/Device mail. There is no fee for the
application and license. After approving an application, the USPS
issues a Postage Meter License (Form 3601-B). Subsequently, for each
Product/Device checked into service, a Form 3602-A, Record of Register
Readings, or equivalent will be
[[Page 14835]]
provided. The licensee must maintain daily register readings by using a
system-generated daily activity report or by completing Form 3602-A to
support refund requests. A customer will not have to apply for a
license to use a Product/Device if the customer already possesses a
valid postage meter license.
2.2 Refusal to Issue Product/Device License
The USPS may refuse to issue a Product/Device license for the
following reasons: The applicant submitted false or fictitious
information on the license application; the applicant violated any
standard for the care or use of a Product/Device or postage meter that
resulted in the revocation of that applicant's Product/Device license
within 5 years preceding submission of the application; or there is
sufficient reason to believe that the Product/Device is to be used in
violation of the applicable standards. The USPS sends the licensee
written notice when an application for a license to lease and use a
Product/Device is refused. The USPS notifies the Provider if the
license is refused. Any applicant refused a license may appeal the
decision under 2.4.
2.3 Revocation of License
The USPS sends written notice to the licensee and the licensee's
Provider of any revocation. Revocation takes effect 10 days after
receipt unless, within that time, the licensee appeals the decision
under 2.4. A license is subject to revocation for any of the following
reasons:
a. A Product/Device is used for any illegal scheme or enterprise or
there is probable cause to believe that the Product/Device is to be
used in violation of the applicable standards.
b. The Product/Device is not reset or audited within a 3-month
period.
c. Sufficient control of a Product/Device is not exercised or the
standards for its care or use are not followed.
d. The Product/Device is kept or used outside the boundaries of the
United States or those U.S. territories and possessions without USPS
approval.
e. Product/Device mail is deposited at other than the licensing
post office (except as permitted by 5.0 or D072).
f. Failure to forward mailpieces to the Provider for quality
assurance as required by 2.5h.
2.4 Appeals
An applicant who is refused a license, or a licensee whose license
is revoked, may file a written appeal with the manager of Retail
Systems and Equipment (RSE), USPS Headquarters (see G043 for address)
within 10 calendar days of receipt of the decision. A licensee
appealing decisions on postage adjustments may file the appeal, with
the same official, within 60 days of the date that the Provider
submitted the postage adjustment recommendation to the USPS.
2.5 Licensee Responsibilities
The licensee's responsibilities for the care and use of a Product/
Device (PSD) include the following:
a. After a PSD is delivered to a licensee, it must remain in the
licensee's custody until it is returned to the authorized Provider.
b. Each day of operation, the licensee must record the readings of
the ascending and descending registers on Form 3602-A. A licensee using
a Product/Device system that records these readings electronically may
use the system-generated report as a substitute for Form 3602-A.
c. The licensee must, upon request, make the Product/Device in the
licensee's custody and corresponding records on transactions
immediately available for review and audit to the Provider or the USPS.
d. The licensee must remote-set Products/Devices at least once
every 3 months for examination.
e. The licensee must immediately notify the Provider of any change
in the licensee's name, address, telephone number, the location of the
Products/Devices, or any other information on the Form 3601-A.
f. The USPS issues a revised Product/Device license based on the
transmission of updated information from the Provider. The licensee
must verify and update license information on a periodic basis. If a
licensee changes the post office where Product/Device mail is to be
deposited, the Product/Device must be checked out of service by the
authorized Provider. The customer must be relicensed at the new post
office before the Provider can issue and reset a replacement device.
g. The licensee must report a misregistering or otherwise defective
Product/Device to the Provider under 2.7 and must ensure that the
defective Product/Device is not used.
h. The licensee must maintain address quality by updating the USPS
CD-ROM disk at least once every 3 months.
i. The licensee must forward a mailpiece produced by the host
system to the Provider at least once every 3 months after
initialization for quality assurance.
j. The customer must enter into a signed lease agreement with the
Provider that includes a financial agreement for resetting the device
with postage.
2.6 Custody of Suspect Product/Device (PSD)
Postal inspectors are authorized to conduct unannounced, on-site
examinations of Products/Devices reasonably suspected of being
manipulated or otherwise defective. An inspector may also immediately
with-draw a suspect Product/Device from service for physical and/or
laboratory examination. The inspector issues the licensee a receipt for
the Product/Device, forwards a copy to the Provider, and, if necessary,
assists in obtaining a replacement Product/Device. Where possible, the
Inspection Service provides the Provider with advance notice that a
Product/Device is to be inspected. Unless there is reason to believe
that the Product/Device is fraudulently set with postage, existing
postage in the Product/Device to be examined is transferred to the
replacement Product/Device.
2.7 Defective product/Device (PSD)
The licensee must immediately report any defective Product/Device
to the Provider. The Provider must retrieve any defective Product/
Device within 3 business days of notification by the licensee and
notify the USPS. A faulty Product/Device may not be used under any
circumstance and must be returned to the Provider. The Provider
provides the licensee with a replacement Product/Device.
2.8 Missing Product/Device (PSD)
The licensee must immediately report to the Provider and licensing
post office the loss or theft of any Product/Device or the recovery of
any missing Product/Device. Reports must include the PSD identification
number and serial number; the date, location, and details of the loss,
theft, or recovery; and a copy of any police report.
2.9 Returning Product/Device (PSD)
After a PSD is delivered to a licensee, the PSD must be kept in the
licensee's custody until returned to the authorized Provider. A
licensee with a faulty or misregistering PSD or who no longer wants to
keep a PSD must return the PSD to the Provider to be checked out of
service. PSDs must be shipped by Priority Mail Returned Receipt for
Merchandise unless the Manager, RSE, USPS Headquarters, gives written
permission to ship at another rate or special service.
[[Page 14836]]
3.0 SETTING PRODUCTS/DEVICES (PSD)
3.1 Initial Setting
Before the licensee is issued a PSD, the PSD must be initialized
and authorized by the Provider. The customer must enter into a lease
agreement with the Provider that includes a financial agreement for
resetting the device with postage. Settings are made according to the
provisions of USPS Computerized Remote Postage Meter Resetting System
(CMRS).
3.2 Payment for Postage
Payment must be made for postage before the Product/Device is set.
The customer is permitted to make payment in one of six ways: cash,
debit card, credit card, wire transfer and (ACH) automated
clearinghouse debit or credit. Acceptance by a provider of all payment
forms, with the exception of debit and credit card, is mandatory. If a
provider elects to offer debit and credit cards as a payment option,
the USPS selected merchant card processor must be used as the
processor. All merchant card processor discount fees must be borne by
the provider.
3.3 Postage Transfers and Refunds
Postage losses due to malfunctions are the responsibility of the
Provider. The USPS provides refunds for any balance remaining on the
PSD. The licensee must submit a written refund request with the
affected PSD to the Provider along with supporting documentation such
as a daily activity report. The USPS also provides refunds to a
licensee for any balance remaining in a CMRS account.
3.4 Periodic Examinations
A Products/Device must be reset at least once every 3 months. An
update of the watchdog timer along with a device audit satisfies this
requirement. The USPS reserves the right to examine the Product/Device
by remote access or otherwise.
3.5 Resetting
The following conditions must be met to reset a Product/Device:
a. The licensee's account must have sufficient funds to cover the
desired postage increment, or the Provider must agree to advance funds
to the USPS on behalf of the licensee. The USPS encourages the
Providers to recommend the use of the following payment forms by order
of preference:
1. ACH Debit
2. ACH Credit
3. Wire Transfer
4. Debit Card Optional
5. Check Card Optional
6. Check
b. As part of the resetting procedure, the licensee must provide
identification information according to the Provider's resetting
specifications.
c. After a Product/Device is reset, the Provider must provide the
licensee with documentation of the transaction and the balance
remaining in the licensee's account, unless the Provider provides a
monthly statement documenting all transactions for the period and the
balance after each transaction.
3.6 Amount of Postage
The PSD descending register is programmed not to exceed $500 at any
time.
4.0 INDICIA
4.1 Design
Product/Device indicia designs (types, sizes, and styles) must be
those specified when Product/Device is approved by the USPS for
manufacture.
4.2 Legibility
Product/Device indicia must be legible and must not overlap. An
illegible or overlapping indicia is not acceptable when determining
postage paid. Minimal standards for acceptable reflectance measurements
of the indicia and the background material are in the Uniform Symbology
Specifications PDF 417. The FIM must meet the dimensions and print
quality specified in DMM C810. For an open system, the address and
POSTNET barcode must meet the specifications listed in the DMM C840.
4.3 On Tape/Label
The USPS-approved tape/label must be used when IBI indicia are to
be printed on tape/label. Labels are subject to corresponding standards
in DMM C810.
4.4 Position
The Product/Device indicia must be printed or applied in the upper
right corner of the envelope, address label, or tag. The indicia must
be at least \1/4\ inch from the right edge of the mailpiece and \1/4\
inch from the top edge of the mailpiece. The indicia barcode must be
horizontally oriented. The indicia must not infringe on the areas
reserved for the facing identification mark (FIM), POSTNET barcode, or
optical character reader (OCR) clear zone. These apply to pieces
meeting the dimensions specified in C800.
4.5 Content, Generally
In usage, the indicia must consist of human-readable information
and two-dimensional barcoded information unless specified otherwise
herein. The human-readable information must show, as a minimum, the
city, state, and 5-digit ZIP Code of the licensing post office, the
device id, and the amount of postage. On approval of the licensing post
office, the Product/Device indicia may contain the name and state
designation of its local classified branch. This authorization does not
apply to classified stations or to contract stations or branches.
Alternatively, the indicia may show the ZIP Code rather than the city
and state designation. In this case, the words ``Mailed From ZIP Code''
and the mailer's delivery address ZIP Code must appear in place of the
city and state, respectively. When it is necessary to print
multidenomination Product/Device indicia on more than one tape, the
human-readable information showing the post office must be on each
tape.
4.6 Complete Date
The month, day, and year must be shown in the indicia on all First-
Class Mail, and on all registered, certified, insured, COD, special
delivery, and special-handling mail. On Standard Mail the day may be
omitted. Mail pieces bearing an indicia with only the month and year
may be accepted during the month shown. They may also be accepted
through the third day of the following month if the postmaster finds
that the mailing was unavoidably delayed before deposit with the USPS.
4.7 Date Accuracy
The date shown in the indicia must be the actual date of deposit.
Mail deposited after the day's last scheduled collection may bear the
date of the next scheduled collection.
4.8 Date Correction
With the mailpiece oriented to read the address, the indicia
showing actual date of mail and the word ``REDATE'' instead of the
postage amount may be used to correct the date. The indicia must be
placed on the non-address side at least 20mm from the bottom edge of
the mailpiece. The indicia impression must not bear the FIM nor the
two-dimensional barcode.
4.9 Postage Correction
An indicia for additional postage may be placed on a shortpaid
mailpiece to correct postage. The corrected indicia must be printed on
the nonaddress side at least 20mm from the bottom edge of the piece and
not on an envelope flap. The Product/Device impression on the
nonaddress side must contain all the indicia elements except for the
FIM. To
[[Page 14837]]
meet two-dimensional barcode readability requirements, an indicia may
be printed on a USPS-approved tape/label.
4.10 Other Matter Printed on Product/Device Indicium
Advertising matter, slogans, return addresses, and the postal
markings specified in 4.11 may be printed with the indicia within space
limitations. A licensee must obtain the content for printing this
matter from the authorized Product/Device Provider. Advertising art
messages must include the mailer's name or words such as ``Mailer's
Message.'' The advertising art must not be obscene, defamatory of any
person or group, or deceptive and it must not advocate any unlawful
action. The Provider must obtain prior approval for all advertising
matter for any Product/Device.
4.11 Postal Markings
Postal markings related to the class or category of mail are
permissible. If placed in the advertising art area, only the postal
marking may be printed, and it must fill the advertising art area as
much as possible. All words must be in bold capital letters at least
\1/4\ inch high (18-point type) and legible at 2 feet. Exceptions are
not made for small advertising art that cannot accommodate a
permissible marking.
4.12 Open System FIM
A mailpiece generated from an open system must bear a USPS-approved
FIM D unless the envelope is courtesy reply with a FIM A or the piece
is not a letter or a flat. The location of the FIM applies to pieces
meeting the dimensions specified in DMM C800.
4.13 Closed System FIM
A mailpiece generated from a closed system must bear a USPS-
approved FIM E, if the piece is nonbarcoded prior to deposit. If the
closed system generates or uses envelopes that bear or will bear a
delivery point barcode (DPBC), the envelopes must have a USPS-approved
FIM D unless the envelope is a courtesy reply with a FIM A or the piece
is not a letter or a flat. The location of the FIM applies to pieces
meeting the dimensions specified in DMM C800.
5.0 MAILINGS
5.1 Preparation
Product/Device mail is subject to the preparation standards that
apply to the class of mail and rate claimed.
5.2 Combination
Product/Device mail may be combined in the same mailing with mail
paid with other methods only if authorized by the USPS.
5.3 Where to Deposit
Except as noted below, Product/Device mail must be deposited at a
post office acceptance unit, window unit, or other location designated
by the postmaster of the licensing post office (i.e., the post office
shown in the indicia) and may not be given to a delivery employee or
deposited in a street collection box, mail chute, receiving box,
cooperative mailing rack, or other mail collection receptacle.
Exceptions to this general standard are [as follows]:
a. Single-piece rate First-Class Mail may be deposited in any
street collection box or such other place where mail is accepted and
that is served by the licensing post office.
b. Limited quantities (i.e., a handful) of single-piece rate First-
Class Mail may be deposited at offices other than the licensing post
office to expedite dispatch.
5.4 Irregularities
Product/Device mail is examined by the USPS to detect
irregularities in preparation and dating. Errors do not include pieces
that legibly show the previous date if the pieces were deposited in a
collection box after the last collection or were not collected by the
USPS as scheduled on the date in the indicia.
6.0 PRODUCT/DEVICE MANUFACTURE AND DISTRIBUTION
Title 39, Code of Federal Regulations, part 502, contains
information about the authorization to manufacture and distribute
Products/Devices; the suspension and revocation of such authorization;
performance standards required in Products/Devices, test plans,
testing, and approval of Products/Devices; required manufacturing
security measures; and standards for the distribution and maintenance
of Products/Devices. Further information may be obtained from Retail
Systems and Equipment, USPS Headquarters.
List of Subjects in 39 CFR Part 502
Administrative practice and procedure, Postal Service.
Although exempt from the notice and comment requirements of the
Administrative Procedure Act (5 U.S.C. 553(b), (c)), regarding proposed
rulemaking by 39 U.S.C. 410(a), the Postal Service invites public
comments on the following proposed amendments to the Code of Federal
Regulations.
For the reasons set out in this document, the Postal Service
proposes to add 39 CFR part 502 as follows:
PART 502--AUTHORITY TO MANUFACTURE AND DISTRIBUTE INFORMATION BASED
INDICIA PRODUCTS AND SERVICES
Sec.
502.1 Product/Service Provider authorization.
502.2 Product/Service Provider qualification.
502.3 Changes in ownership or control.
502.4 Burden of proof standard.
502.5 Suspension and revocation of authorization.
502.6 Description of product/device.
502.7 Description of open and closed systems.
502.8 Product/Service Provider.
502.9 Product/Device specifications.
502.10 Test plans.
502.11 Security testing.
502.12 Product/Device approval.
502.13 Conditions for approval.
502.14 Suspension and revocation of approval.
502.15 Reporting.
502.16 Administrative sanction on reporting.
502.17 Materials and workmanship.
502.18 Destruction of product/device indicia.
502.19 Inspection of new products/devices.
502.20 Distribution facilities.
502.21 Distribution controls.
502.22 Administrative sanctions.
502.23 Product/Device replacement.
502.24 Inspection of products/devices not located.
502.25 Products/Devices not located.
502.26 Computerized remote postage meter/PSD resetting.
502.27 Indicia quality assurance.
502.28 Product/Device refunds.
502.29 Key management requirements.
502.30 Provider infrastructure.
502.31 Notice of proposed changes in regulations.
Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 410, 2610,
2605; Inspector General Act of 1978, as amended (Pub. L. 95-452, as
amended), 5 U.S.C. App. 3.
Sec. 502.1 Product/Service Provider authorization.
Any person or concern seeking authorization to manufacture and/or
distribute an Information Based Indicia Program (IBIP) Product/Device
must submit a request to the Postal Service in person or in writing.
Upon qualification and approval, the applicant is authorized in writing
to manufacture Products/Devices and to lease them to persons licensed
by the Postal Service. The Postal Service may specify the functional
area charged with processing the application and administering its
Product/Device program.
[[Page 14838]]
Sec. 502.2 Product/Service Provider qualification.
Any person or Product/Service Provider (hereafter referred to as
Provider) wanting authorization to provide and/or lease, sell, or
otherwise distribute, as approved by the Postal Service, Products/
Devices for use by licensees under Domestic Mail Manual P050.1.2 must:
(a) Satisfy the Postal Service of its integrity and financial
responsibility;
(b) Obtain approval of at least one Product/Device model
incorporating all the features and safeguards specified in Sec. 502.9;
(c) Have, or establish, and keep under its supervision and control
adequate manufacturing facilities suitable to carry out the provisions
of Sec. 502.18 through Sec. 502.21 to the satisfaction of the Postal
Service (such facilities must be subject to unannounced inspection by
representatives of the Postal Service); and
(d) Have, or establish, and retain adequate facilities for the
control, distribution, and maintenance of Products/Devices and their
replacement when necessary.
Sec. 502.3 Changes in ownership or control.
Any person or concern wanting to acquire ownership or control of an
authorized Provider must provide the Postal Service with satisfactory
evidence of that person's or concern's integrity and financial
responsibility.
Sec. 502.4 Burden of proof standard.
The burden of proof is on the Postal Service in the adjudication of
suspensions and revocations under Sec. 502.5 and Sec. 502.14 and
administrative sanctions under Sec. 502.16 and Sec. 502.22. Except as
otherwise indicated in those sections, the standard of proof shall be
the preponderance of evidence standard.
Sec. 502.5 Suspension and revocation of authorization.
(a) The Postal Service may suspend and/or revoke authorization to
provide and/or distribute any or all of a Provider's Products/Devices
if the Provider engages in any unlawful scheme or enterprise, fails to
comply with any provision in this part 502, or fails to implement
instructions issued in accordance with any final decision issued by the
Postal Service within its authority over the Product/Device programs.
(b) The decision to suspend or revoke a Provider's authorization
shall be based on the nature and circumstances of the violation (e.g.,
whether the violation was willful, whether the Provider voluntarily
admitted to the violation, whether the Provider cooperated with the
Postal Service, whether the Provider implemented successful remedial
measures) and on the Provider's performance history. Before determining
whether a Provider's authorization to manufacture and/or distribute
Products/Devices should be revoked, the procedures in paragraph (c) of
this section shall be followed.
(c) Suspension in all cases shall be as follows:
(1) Upon determination by the Postal Service that a Provider is in
violation of the provisions in this part 502, the Postal Service shall
issue a written notice of proposed suspension citing deficiencies for
which suspension or authorization to manufacture and/or distribute a
specific Product/Device or classes thereof may be imposed under
paragraph (c)(2) of this section. Except in cases of willful violation,
the Provider shall be given an opportunity to correct deficiencies and
achieve compliance with all requirements within a time limit
corresponding to the potential risk to postal revenue.
(2) In cases of willful violation, or if the Postal Service
determines that the Provider has failed to correct cited deficiencies
within the specified time limit, the Postal Service shall issue a
written notice setting forth the facts and reasons for the decision to
suspend and the effective date if a written defense is not presented as
provided in paragraph (d) of this section.
(3) If, upon consideration of the defense as provided in paragraph
(e) of this section, the Postal Service deems that the suspension is
warranted, the suspension shall remain in effect for up to 90 days
unless withdrawn by the Postal Service, as provided in paragraph
(c)(4)(iii) of this section.
(4) At the end of the 90-day suspension, the Postal Service may:
(i) Extend the suspension in order to allow more time for
investigation or to allow the Provider to correct the problem;
(ii) Make a determination to revoke authorization to provide and/or
distribute the Provider's Products/Devices in part or in whole; or
(iii) Withdraw the suspension based on identification and
implementation of a satisfactory solution to the problem. Provider
suspensions may be withdrawn before the end of the 90-day period if the
Postal Service determines that the Provider's solution and
implementation are satisfactory.
(d) The Provider may present the Postal Service with a written
determination within 30 calendar days of receiving the written notice
(unless a shorter period is deemed necessary). The defense must include
all supporting evidence and specify the reasons for which the order
should not be imposed.
(e) After receipt and consideration of the defense, the Postal
Service shall advise the Provider of the decision and the facts and
reasons for it. The decision shall be effective on receipt unless it
provides otherwise. The decision shall also advise the Provider that it
may appeal that determination within 30 calendar days of receiving
written notice (unless a shorter period is deemed necessary), as
specified therein. The appeal must include all supporting evidence and
specify the reasons the Provider believes that the decision is
erroneous.
(f) An order or final decision under this section does not preclude
any other criminal or civil statutory, common law, or administrative
remedy that is available by law to the Postal Service, the United
States, or any other person or concern.
Sec. 502.6 Description of product/device.
The Product/Device prints an authorized Postal Service Information
Based Indicia that shows evidence of postage. The indicia consists of a
USPS-approved two-dimensional barcode and certain human-readable
information such as city and state, 5-digit ZIP Code of licensing post
office, Device ID number, date, and amount of postage. The Product/
Device includes as a primary component a postal security device (PSD)
that provides critical functionality for accounting postage with a
computer-based (open system) or postage meter-based (closed system) and
a host system. The PSD and host system interact to generate the
indicia. The Product/Device is remotely set with postage value and
requires the licensee to have funds on deposit with the Postal Service
prior to initial setting or resetting.
Sec. 502.7 Description of open and closed systems.
(a) An ``Open System'' does not require that the implementing
components be dedicated to the IBIP functions. This system may allow
multiple non-postage related software applications to be in use and it
also may depend on several interconnected devices that may serve
multiple purposes for their user. The open system computer and
peripherals such as the printer and CD-ROM drive may perform functions
unrelated to the Information Based Indicia Program (IBIP). Host
operations may depend upon computer software such as operating systems
and communications
[[Page 14839]]
systems. The open system version is responsible for composing a
complete, integrated mailpiece front (or a tape/label for the piece).
(b) The ``closed system'' is a device dedicated toward IBIP
functions. Closed systems do not have to satisfy Postal Service address
standards or include the destination ZIP Code in the indicia. Closed
systems may satisfy the other administrative requirements through
external processes. If a closed system operates as a component of an
integrated mailing system, it may be subject to the open system
requirements. An integrated mailing system shall be subject to open
system requirements if it includes a computer interfaced to the meter
and it prepares mailpiece fronts or labels that include both the
destination address and the indicium. The integrated system is an open
system even if different printers apply the address and the indicium.
If the mailing system satisfies these criteria, the USPS considers the
``meter'' to be an open system peripheral device that performs the dual
functions of printing indicia and interfacing the PSD to the open host.
The integrated mailing system must be approved by the USPS according to
the open system criteria.
Sec. 502.8 Product/Device provider.
A Product/Device is available only through a lease agreement from
Providers authorized by the Postal Service. For an open system, the
licensee may purchase the software if the PSD component operates
independently of the software. The open system form of the host is
envisioned to operate on personal computers. For a closed system, the
licensee may purchase the printing device if it is rendered
nonfunctional without the PSD. The Postal Service holds Providers
responsible for the life cycle, control, operation, maintenance, and
replacement of their Products/Devices.
Sec. 502.9 Product/Device specifications.
The IBIP Specifications describe system elements that include
Postal Service infrastructure, Provider infrastructure, and customer
infrastructure. The existing Postal Service infrastructure supports
customer authorization, product audit, postage resetting reporting,
total population management, key management support, financial
reconciliation, product lifecycle tracking, lost and stolen/
irregularity management functions. The Provider infrastructure will
support all IBIP functions. The customer infrastructure will consist of
the Product/Device's PSD and host system. The Postal Service will
evaluate and test IBIP Products/Devices for compliance with this
infrastructure.
(a) The indicium data content is described in the Information Based
Indicia Program (IBIP) Indicium Specification. Contact the Manager,
Retail Systems and Equipment, USPS, 475 L'Enfant Plaza, Washington DC
20260-6807 for these requirements.
(b) The PSD implements digital signature technology for the
creation and verification of digital signatures. Postal Security Device
Specification is described in the Information Based Indicia Program
Postal Security Device Specification. Contact the Manager, Retail
Systems and Equipment, USPS, 475 L'Enfant Plaza, Washington DC 20260-
6807 for these requirements.
(c) Indicia Design Requirements--The indicia design must comply
with the requirements in Domestic Mail Manual (DMM) P050.
(d) Host System Functional Requirements are contained in the
Information Based Indicia Program Host System Specification. Contact
the Manager, Retail Systems and Equipment, USPS, 475 L'Enfant Plaza,
Washington DC 20260-6807 for these requirements.
(e) Key Management Functional Requirements are contained in The
Information Based Indicia Program Key Management Plan. Contact the
Manager, Retail Systems and Equipment, USPS, 475 L'Enfant Plaza SW,
Washington DC 20260-6807 for these requirements.
Sec. 502.10 Test plans.
Each Product/Device Model that is submitted for USPS approval must
be submitted in accordance with the provisions contained in the
Information Based Indicia Program Interim Product Submission
Procedures. Contact the Manager, Retail Systems and Equipment, USPS,
475 L'Enfant Plaza, Washington DC 20260-6807 for these requirements.
Sec. 502.11 Security testing.
The Postal Service reserves the right to require or conduct
additional examination and testing at any time, without cause, of any
Product/Device submitted to the Postal Service for approval or approved
by the Postal Service for manufacture and distribution.
Sec. 502.12 Product/Device approval.
As provided in Sec. 502.12, the Provider has a duty to report
security weaknesses to the Postal Service to ensure that each Product/
Device model and every Product/Device in service protects the Postal
Service against loss of revenue at all times. A grant of approval of a
model does not constitute an irrevocable determination that the Postal
Service is satisfied with the revenue-protection capabilities of the
model. After approval is granted to manufacture and distribute a
Product/Device, no change affecting the features or safeguards of a
Product/Device may be made except as authorized or ordered by the
Postal Service in writing.
Sec. 502.13 Conditions for approval.
(a) The Postal Service may require at any time that production
models of approved Products/Devices, as well as the design, user
manuals, and specifications applicable to such Products/Devices and any
revisions thereof, be deposited with the Postal Service.
(b) On request by the Postal Service, additional Products/Devices
must be submitted to the Postal Service for testing, at the expense of
the Provider.
(c) All Product/Device submissions must adhere to the requirements
contained in the Information Based Indicia Program Interim Product
Submission Procedures. Particular attention should be given to the
requirement to simultaneously submit an identical Product/Device to a
laboratory accredited under the National Voluntary Laboratory
Accreditation Program (NVLAP) for FIPS 140-1 certification.
Sec. 502.14 Suspension and revocation of approval.
(a) The Postal Service may suspend Product/Device approval under
Sec. 502.13 if the Postal Service has probable cause to believe that a
Provider's Product/Device or class and/or version thereof poses an
unreasonable risk to postal revenue. Suspension of approval to Provider
or distribute a Product/Device or class and/or version thereof, in
whole or in part, shall be based on the potential risk to postal
revenue. Before determining whether approval of a Product/Device or
class and/or version should be revoked, the procedures in paragraph (b)
of this section shall be followed.
(b) Suspension in all cases shall be as follows:
(1) Upon determination by the Postal Service that a Product/Device
poses an unreasonable risk to postal revenue, the Postal Service shall
issue a written notice of proposed suspension citing deficiencies for
which suspension may be imposed under paragraph (b)(2) of this section.
The Provider shall be given an opportunity to correct deficiencies and
achieve compliance with all requirements within a time limit
[[Page 14840]]
corresponding to the potential risk to postal revenue.
(2) If the Postal Service determines that the Provider has failed
to correct cited deficiencies within the specified time limit, the
Postal Service shall issue a written notice setting forth the facts and
reasons for the decision to suspend and the effective date if a written
defense is not presented as provided in paragraph (c) of this section.
(3) If, upon consideration of the defense as provided in paragraph
(d) of this section, the Postal Service deems that the suspension is
warranted, the suspension shall remain in effect for up to 90 days
unless withdrawn by the Postal Service, as provided in paragraph
(b)(4)(iii) of this section.
(4) At the end of the 90-day suspension, the Postal Service may:
(i) Extend the suspension in order to allow more time for
investigation or to allow the Provider to correct the problem;
(ii) Make a determination to revoke the approval of the Provider's
Product/Device or class and/or version, or
(iii) Withdraw the suspension based on identification and
implementation of a satisfactory solution to the problem. Provider
suspensions may be withdrawn before the end of the 90-day period if the
Postal Service determines that the Provider's solution and
implementation are satisfactory.
(c) The Provider may present the Postal Service with a written
defense to any suspension or revocation determination within 30
calendar days of receiving the written notice (unless a shorter period
is deemed necessary). The defense must include all supporting evidence
and specify the reasons for which the order should not be imposed.
(d) After receipt and consideration of the written defense, the
Postal Service shall advise the Provider of the decision and the facts
and reasons for it. The decision shall be effective on receipt unless
it states otherwise. The decision shall also advise the Provider that
it may appeal that determination within 30 calendar days of receiving
written notice (unless a shorter period is deemed necessary), as
specified therein. The appeal must include all supporting evidence and
the reasons that the Provider believes that the decision is erroneous.
(e) An order or final decision under this section does not preclude
any other criminal or civil statutory, common law, or administrative
remedy that is available by law to the Postal Service, the United
States, or any other person or concern.
Sec. 502.15 Reporting.
(a) For purposes of this section, ``Provider'' refers to the
authorized Product/Service Provider in Sec. 502.1 and its foreign or
domestic affiliates, subsidiaries, assigns, dealers, independent
dealers, employees, and parent corporations.
(b) Each authorized Product/Service Provider in Sec. 502.1 must
submit a preliminary report to notify the Postal Service promptly (in
no event more than 21 calendar days of discovery) of the following:
(1) All findings or results of any testing known to the Provider
concerning the security or revenue protection features, capabilities,
or failings of any Product/Device sold, leased, or distributed by the
Provider that has been approved for sale, lease, or distribution by the
Postal Service or any foreign postal administration; or have been
submitted for approval by the Provider to the Postal Service or a
foreign postal administration.
(2) All potential security weaknesses or methods of Products/
Devices tampering that the Provider distributes of which the Provider
knows or should know, and the Product/Device or model subject to each
method. These potential security weaknesses include but are not limited
to suspected equipment defects, suspected abuse by a Product/Device
licensee or Provider employee, suspected security breaches of the
Computerized Remote Postage Meter Resetting System, cryptographic key
compromises, occurrences outside normal performance, or any repeatable
deviation from normal Product/Device performance (within the same model
family and/or by the same licensee).
(c) Within 45 days of the preliminary notification of the Postal
Service under Sec. 502.15(b), the Provider must submit a written report
to the Postal Service. The report must include the circumstances,
proposed investigative procedure, and the anticipated completion date
of the investigation. The Provider must also provide periodic status
reports to the Postal Service during subsequent investigation and, on
completion, must submit a summary of the investigative findings.
(d) The Provider must establish and adhere to timely and efficient
procedures for internal reporting of potential security weaknesses. The
Provider is required to submit a copy of internal reporting procedures
and instructions to the Postal Service for review.
Sec. 502.16 Administrative sanction on reporting.
(a) Notwithstanding any act, admission, or omission by the Postal
Service, an authorized Provider may be subject to an administrative
sanction for failing to comply with Sec. 502.15.
(b) The Postal Service shall determine all costs and revenue losses
measured from the date that the Provider knew, or should have known, of
a potential security weakness, including, but not limited to,
administrative and investigative costs and documented revenue losses
that result from any Product/Device for which the Provider failed to
comply with any provision in Sec. 502.15. The Postal Service may
recover from Provider any and all such costs and losses (net of any
amount collected by the Postal Service from the licensees or Product/
Device users) with interest by issuing a written notice to the Provider
setting forth the facts and reasons on which the determination to
impose the sanction is based. The notice shall advise the Provider of
the date that the action takes effect if a written defense is not
presented within 30 calendar days of receipt of the notice.
(c) The Provider may present the Postal Service with a written
defense to the proposed action within 30 calendar days of receipt. The
defense must include all supporting evidence and specify the reasons
for which the sanction should not be imposed.
(d) After receipt and consideration of the defense, the Postal
Service shall advise the Provider of the decision and the facts and
reasons for it; the decision shall be effective on receipt unless it
states otherwise. The decision shall also advise the Provider that it
may, within 30 calendar days of receiving written notice, appeal that
determination as specified therein.
(e) The Provider may submit a written appeal to the Postal Service
within 30 calendar days of receipt of the decision. The appeal must
include all supporting evidence and specify the reasons that the
Provider believes that the administrative sanction was erroneously
imposed. The submission of an appeal stays the effectiveness of the
sanction.
(f) The imposition of an administrative sanction under this section
does not preclude any other criminal or civil statutory, common law, or
administrative remedy that is available by law to the Postal Service,
the United States, or any other person or concern.
Sec. 502.17 Materials and workmanship.
All Products/Devices must adhere to the quality in materials and
workmanship of the approved
[[Page 14841]]
production model and must be manufactured with suitable chips, tools .
. . etc., to ensure proper functioning.
Sec. 502.18 Destruction of product/device indicia.
All IBIP indicia created in the process of testing the Products/
Devices by the provider, or its agent, must be collected and destroyed
daily.
Sec. 502.19 Inspection of new products/devices.
All new Products/Devices must be inspected carefully before leaving
the Provider's Product/Device facility.
Sec. 502.20 Distribution facilities.
An authorized Provider must keep adequate facilities for and
records of the distribution, control, and maintenance of Products/
Devices. All such facilities and records are subject to inspection by
Postal Service representatives.
Sec. 502.21 Distribution controls.
Each authorized Product/Service Provider must do the following:
(a) Hold title permanently to all leased PSDs except those
purchased by the Postal Service.
(b) On behalf of applicants, electronically transmit copies of
completed PS Forms 3601-A, Application for a License to lease and use
Postage Meters, to the designated Postal Service central processing
facility.
(c) Lease PSDs only to parties that have valid licenses issued by
the Postal Service.
(d) Supply with the host system only Product/Device slogan or
advertising art that meets the Postal Service requirements for suitable
quality and content. The Provider must obtain prior approval for all
advertising matter for any Product/Device.
(e) Unless otherwise authorized by the Postal Service, the Provider
must immediately obtain and check out of service PSDs, if the licensee
no longer wants the PSD or if the PSD is to be removed from service for
any other reason. The Provider must keep in its possession for at least
1 year the licensee's PS Form 3601-C, Postage Meter Installation,
Withdrawal, or Replacement, and copy of the applicable PS Form 3602-A,
Record of Meter Register Readings, or equivalent.
(f) Retrieve any misregistering, faulty, or defective Product/
Device to be checked out of service within 3 business days of being
notified by the licensee of the defect. After examining the Product/
Device withdrawn for apparent faulty operation affecting registration,
the Provider must compile a report explaining the malfunction to Retail
Systems and Equipment (RSE), USPS Headquarters.
(g) Report promptly the loss or theft of any Product/Device or the
recovery of any lost or stolen Product/Device. The Provider must
provide notification to the Postal Service by completing a standardized
lost and stolen Product/Device incident report and filing it with the
Postal Service within 30 days of the Provider's determination of a
Product/Device loss, theft, or recovery. The Provider must complete all
preliminary location activities specified in Sec. 502.25 before
submitting this report to the Postal Service.
(h) Cancel a lease agreement with any lessee whose Product/Device
license is revoked by the Postal Service, remove the Product/Device
within 15 calendar days, and have the Product/Device checked out of
service.
(i) Promptly remove from service any Product/Device that the Postal
Service indicates should be removed from service. When a Product/Device
license is canceled, all Products/Devices in use by the licensee must
be removed from service.
(j) Examine each Product/Device withdrawn from service for failure
to record its operations correctly and accurately, and report to the
Postal Service the failure or fault that caused the failure.
(k) Provide RSE monthly with a compatible computer tape of lost or
stolen Products/Devices. The file is due on the first of each month
(for the preceding month's activity).
(l) Take reasonable precautions in the transportation and storage
of Products/Devices to prevent use by unauthorized individuals.
Providers must ship all Products/Devices by Postal Service Registered
Mail unless given written permission by the Postal Service to use
another carrier. The Provider must demonstrate that the alternative
delivery carrier employs security procedures equivalent to those for
registered mail.
(m) Submit a daily financial transaction for each postage value
download or postage refill.
Sec. 502.22 Administrative sanction.
(a) Product/Device for purposes of this section means any Product/
Device manufactured by an authorized Provider under Sec. 502.1 that is
not owned or leased by the Postal Service.
(b) An authorized Provider that, without just cause, fails to
conduct or perform adequately any of the controls in Sec. 502.21, to
follow standardized lost and stolen Product/Device incident reporting
in Sec. 502.25, or to conduct any of the inspections required by
Sec. 502.24 in a timely fashion is subject to an administrative
sanction based on the investigative and administrative costs and
documented revenue losses (net of any amount collected by the Postal
Service from the licensee or Product/Device user) with interest per
occurrence measured from the date on which the cost and/or loss
occurred, as determined by the Postal Service. Sanctions shall be based
on the costs and revenue losses that result from the Provider's failure
to comply with these requirements.
(c) The Postal Service may impose an administrative sanction under
this section by issuing a written notice to the Provider setting forth
the facts and reasons on which the determination to impose the sanction
is based. The Postal Service shall determine all costs and losses. The
notice shall advise the Provider of the date that the action shall take
effect if a written defense is not presented within 30 calendar days of
receipt of the notice.
(d) The Provider may present to the Postal Service a written
defense to the proposed action within 30 calendar days of receipt of
the notice. The defense must include all supporting evidence and
specify the reasons for which the sanction should not be imposed.
(e) After receipt and consideration of the written defense, the
Postal Service shall advise the Provider of the decision and the facts
and reasons for it. The decision shall be effective on receipt unless
it states otherwise.
(f) The Provider may submit a written appeal of the decision within
30 calendar days of receiving the decision, addressed to the manager of
Retail Systems and Equipment, Postal Service Headquarters. The appeal
must include all supporting evidence and specify the reasons that the
Provider believes that the administrative sanction was erroneously
imposed. The submission of an appeal stays the effectiveness of the
sanction.
(g) The imposition of an administrative sanction under this section
does not preclude any other criminal or civil statutory, common law, or
administrative remedy that is available by law to the Postal Service,
the United States, or any other person or concern.
Sec. 502.23 Product/Device replacement.
(a) The Provider must keep its Products/Devices in proper operating
condition for licensees by replacing them when necessary or desirable
to prevent electronic failure, malfunction, clock/timer/battery life
expiration, or mechanical breakdown.
[[Page 14842]]
(b) The Provider must provide the licensees with modifications
reflecting rate changes.
Sec. 502.24 Inspection of products/devices in use.
The Provider must conduct audits of PSDs at least once every 3
months in conjunction with the postage value resetting requirements in
Sec. 502.26. In general, the primary role of the PSD in the device
audit function is to create device audit messages and pass those
messages to the host system for transmission to the Postal Service.
Sec. 502.25 Products/Devices not located.
Upon learning that one or more of its Products/Devices in service
cannot be located, the Provider must undertake reasonable efforts to
locate the Products/Devices by following a series of Postal Service-
specified actions designed to locate the Products/Devices. If these
efforts are unsuccessful and a Product/Device is determined to be lost
or stolen, the Provider must notify the Postal Service within 30 days
by submitting a Lost and Stolen Product/Device Incident Report.
(a) If a licensee cannot be located, the Provider must, at a
minimum, complete the following actions:
(1) Call directory assistance for the licensee's new telephone
number.
(2) Contact the licensee's local post office for current change of
address information.
(3) Contact the CMLS site and the local MATS coordinator to verify
the location of the Product/Device or licensee currently maintained in
those Postal Service records.
(4) Contact the rental agency responsible for the property where
the licensee was located, if applicable.
(5) Visit the licensee's last known address to see whether the
building superintendent or a neighbor knows the licensee's new address.
(6) Mail a certified letter with return receipt to the licensee at
the last known address with the endorsement ``Forwarding and Address
Correction Requested.''
(7) If new address information is obtained during these steps, any
scheduled Product/Device inspection must be completed promptly.
(b) If a Product/Device is reported to be lost or stolen by the
licensee, the Provider must, at a minimum, complete the following
actions:
(1) Ensure that the licensee has filed a police report and that
copies have been provided to the appropriate Inspection Service
Contraband Postage Identification Program (CPIP) specialist.
(2) Withhold issuance of a replacement Product/Device until the
missing Product/Device has been properly reported to the police and to
the appropriate Inspection Service CPIP specialist.
(c) If the Provider later learns that the Product/Device has been
located and/or recovered, the Provider must update lost and stolen
Product/Device activity records, inspect the Product/Device promptly,
initiate a postage adjustment or transfer, if appropriate, and check
the Product/Device out of service if a replacement Product/Device has
been supplied to the licensee.
(d) If a Product/Device reported to the Postal Service as lost or
stolen is later located, the Provider is responsible for submitting a
new Lost and Stolen Product/Device Incident Report that references the
initial report and outlines the details of how the Product/Device was
recovered. This report must be submitted to the Postal Service within
30 days of recovery of the Product/Device. The Provider is also
responsible for purging lost and stolen Product/Device reports that are
provided on a periodic basis to the Postal Service for those Product/
Devices that have been recovered.
(e) Any authorized Provider that fails to comply with standardized
lost and stolen reporting procedures and instructions is subject to an
administrative sanction under Sec. 502.22, as determined by the Postal
Service.
Sec. 502.26 Computerized Remote Postage Meter Resetting/PSD Resetting.
(a) Description. The Computerized Remote Meter Resetting System
(CMRS) permits postal licensees to reset PSDs at their places of
business and/or homes via modem and/or network interface. To reset a
PSD, the licensee must connect to the Provider and provide identifying
data and device audit data. Before proceeding with the setting
transaction, the Provider must verify all the data (including
conducting the product audit) and ascertain from its own files whether
the licensee has sufficient funds on deposit with the Postal Service.
If the funds are available and the product audit was successful, the
Provider may complete the setting transaction.
(b) Deposits with the Postal Service. (1) A CMBS licensee is
required to have funds available on deposit with the Postal Service
before resetting a PSD or the Provider may opt to provide a funds
advance in accordance with The Cash Management Operating Specifications
For The Computerized Remote Postage Meter Resetting System. Contact the
Treasurer's Office of the United States Postal Service, 475 L'Enfant
Plaza SW, Washington, DC 20260-5130 for this document. The details of
this deposit requirement are covered within the Acknowledgment of
Deposit Requirement document. By signing this document, the licensee
agrees to transfer funds to the Postal Service through a lockbox bank,
as specified by the Provider, for the purpose of prepayment of postage.
The Provider representative must provide all new CMRS licensees with
this document when a new account is established. The document must be
completed and signed by the licensee and sent to the Minneapolis
Accounting Service Center by the Provider.
(2) This is required to incorporate the following language into its
Product/Device rental agreements:
Acknowledgement of Deposit Requirement
See The Cash Management Operating Specifications For The
Computerized Remote Postage Meter Resetting System. Contact the
Treasurer's Office of the United States Postal Service, 475 L'Enfant
Plaza SW, Washington DC 20260-5130 for this document.
Sec. 502.27 Indicia quality assurance.
The licensee is required to forward a mailpiece to the Provider at
least once every 3 months for evaluation. If the licensee fails to
comply with this requirement, the Provider must notify the licensee
that, all future postage value resettings will be denied. The Provider
must notify the Postal Service of all noncomplying licensees, so that
license revocations can be initiated. The Provider is required to
provide guidance to the licensee to correct any deficiencies that are
discovered.
Sec. 502.28 Product/Device refunds.
Postage losses due to malfunctions are the responsibility of the
Provider. In order to receive a refund for any remaining balance on a
PSD, the licensee will be required to submit a written refund request
and the PSD to the Provider. Additionally, supporting documentation
such as a daily activity report must be submitted. The Postal Service
will also provide refunds to a licensee for any balance remaining in
their CMRS account.
Sec. 502.29 Key management requirements.
These requirements are contained in The Information Based Indicia
Program Key Management Plan. Contact the Manager, Retail Systems and
Equipment, USPS, 475 L'Enfant Plaza, Washington DC 20260-6807 for these
requirements.
Sec. 502.30 Provider infrastructure.
The Provider must establish and maintain an interface to USPS
systems as specified in the Information Based
[[Page 14843]]
Indicia Program Product/Service Provider Infrastructure Specification.
Contact the Manager, Retail Systems and Equipment, USPS, 475 L'Enfant
Plaza, Washington DC 20260-6807 for these requirements.
Sec. 502.31 Notice of Proposed Changes in Regulations.
Appropriate amendments to 39 CFR parts 111 and 502 to reflect these
changes will be published if the proposal is adopted
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 97-7861 Filed 3-27-97; 8:45 am]
BILLING CODE 7710-12-M
