02-9921. Authorization To Manufacture and Distribute Postage Meters

AGENCY:

Postal Service.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule amends the regulations for postage meter inventory control and for the protection and control of internal and security components.

DATES:

The Postal Service must receive your comments on or before May 24, 2002.

ADDRESSES:

Mail or deliver written comments to the Manager, Postage Technology Management, 1735 N. Lynn Street, Room 5011, Arlington, VA 22209-6050. You can view and copy all written comments at the same address between 9 a.m. and 4 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT:

Wayne Wilkerson by fax at 703-292-4050.

SUPPLEMENTARY INFORMATION:

The United States Postal Service is seeking to improve the secure handling of postage meters and their security components by the approved postage meter manufacturers, and to extend the regulations to third-party agents and representatives of the manufacturers. We are proposing to amend the regulations to address these concerns and to align the regulations with changes to the Domestic Mail Manual (DMM) regarding postage meters published in the Federal Register (66 FR 56432-56447) on November 8, 2001. We will review any public comments and will issue a final rule amending these sections. We will amend the remaining sections of CFR part 501 in the near future so that they all reflect the changes in the postage meter population and the changes in the DMM.

List of Subjects in 39 CFR Part 501

• Administrative practice and procedure
• Postal Service

Notice and Comment

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 is proposing to amend 39 CFR part 501 as follows:

PART 501—AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE METERS

1. The authority citation for part 501 continues to read as follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410, 2601, 2605; Inspector General Act of 1978, as amended (Public Law 95-452, as amended), 5 U.S.C. App. 3.

2. Sections 501.22 and 501.28 are revised to read as follows:

§ 501.22

Inventory control.

(a) An authorized manufacturer must maintain sufficient facilities for and records of the distribution, control, storage, maintenance, repair, replacement, and destruction or disposal of all meters and their components to enable accurate accounting thereof throughout the entire life cycle of the meter.

Recordkeeping is required for all meters including newly produced meters; active leased meters; inactive, unleased meters; and lost and stolen meters. All such facilities and records are subject to inspection by Postal Service representatives.

(b) If the manufacturer uses a third party to control, distribute, maintain, replace, repair, or dispose of meters, the Manager of Postage Technology Management, USPS Headquarters, must specifically authorize in writing all aspects of the arrangement between the parties relating to the custody and control of postage meters.

(1) The third-party relationship shall not compromise any security element of the meter. The functions of the third party with respect to meters are subject to the same scrutiny as the equivalent functions of the manufacturer.

(2) Any authorized third party must keep adequate facilities for and records of meters and their components in accordance with (a). All such facilities and records are subject to inspection by Postal Service representatives, in so far as they are used to distribute, control, store, maintain, repair, replace, destroy, or dispose of meters.

(3) The manufacturer must ensure that any party acting in its behalf in any of the functions described in subsection (a) maintains adequate facilities, records, and procedures for the security of the meters. The Postal Service can request termination of the third-party arrangement relating to the custody and control of postage meters if it finds deficiencies and the deficiencies are not corrected in a timely manner.

* * * * *

§ 501.28

Protection and control of internal and security components.

Any physical or electronic access to the internal components of a meter, as well as any access to software or security parameters, must be conducted within an approved factory or meter repair facility under the manufacturer's direct control and active supervision. The Postal Service must check meters out of service before any component, software, or security parameter is accessed or modified in any way or internal repairs are undertaken. This does not apply to Postal Service-approved user, field, or postal access to a specific internal component or software. To prevent unauthorized use, the manufacturer or any third party acting on its behalf must keep secure any equipment or other component that can be used to open or access the internal, electronic, or secure components of a meter.

* * * * *

An appropriate amendment to 30 CFR part 501 to reflect these changes will be published if the proposal is adopted.

Stanley F. Mires,

Chief Counsel, Legislative.