E9-11060. Global Direct Contracts (MC2009-9) Agreement

AGENCY:

Postal Regulatory Commission.

ACTION:

Notice.

SUMMARY:

The Commission is noticing a recently filed Postal Service request to add an additional Global Direct Contracts agreement to the Competitive Product List. This notice addresses procedural steps associated with this filing.

DATES:

Comments are due May 13, 2009.

ADDRESSES:

Submit comments electronically via the Commission's Filing Online system at http://www.prc.gov.

FOR FURTHER INFORMATION CONTACT:

Stephen L. Sharfman, General Counsel, 202-789-6820 and [e-mail].

SUPPLEMENTARY INFORMATION:

I. Background

On May 1, 2009, the Postal Service filed a notice announcing that it has entered into an additional Global Direct Contracts agreement.^[1] Global Direct Contracts provide a rate for mail acceptance within the United States, transportation to a receiving country of mail that bears the destination country's indicia and payment by the Postal Service of the appropriate settlement charges to the receiving country. The Postal Service believes the instant agreement is functionally equivalent to previously submitted Global Direct agreements, and supported by the Governors' Decision filed in Docket No. MC2008-7.^[2] The Postal Service contends that the instant agreement should be included within the Global Direct Contracts product.

The instant agreement. The Postal Service filed the instant agreement pursuant to 39 CFR 3015.5. In addition, the Postal Service contends that the agreement is in accordance with PRC Order No. 153.^[3] It submitted the agreement and supporting material under seal, and attached a redacted copy of the certified statement required by 39 CFR 3015.5(c)(2) to the Notice.

The Notice provides the Postal Service's rationale for concluding that the instant agreement is functionally equivalent to the agreements filed in Docket Nos. CP2009-10, CP2009-11 and CP2009-18. Id. at 2-6.

The Postal Service states that the instant agreement fits within the Mail Classification Schedule language for Global Direct Contracts, and indicates that this agreement is set to expire 1 year after its effective date which the Postal Service states will be within 30 days of completion of all regulatory approvals.^[4]

The Postal Service asserts that “[i]n almost all substantive respects” the instant agreement “resembles the contract in Docket No. CP2009-11[.]” Id. at 4. It notes that the agreement contains a volume commitment, whereas the agreement in Docket No. CP2009-11 has a postage commitment. Notwithstanding any differences in prices, foreign services offered, foreign destinations, or volume or postage commitments, the Postal Service contends that the instant agreement is functionally equivalent to Global Direct agreements filed previously. Id. at 4-5. It characterizes other differences from previous Global Direct agreements as cosmetic or minor, having no effect on the agreement's “essential cost or market characteristics.” Id. at 6.

Lastly, the Postal Service notes that the agreement contains provisions that provide certain automatic price changes triggered by objective, external factors. It argues that “[t]he formulaic, pre-established nature of such changes essentially removes them from the area of Postal Service discretion.” Id. at 5, n.8. Consequently, the Postal Service asserts that such changes do not represent price changes under 39 CFR 3015.5. Thus, in lieu of filing under rule 3015.5, it “proposes to file such changes with the Commission on a notice-type basis, without the expectation that the filings should lead to further proceedings or review.” Id.

II. Notice of Filing

The Commission establishes Docket No. CP2009-29 for consideration of matters related to the agreement identified in the Postal Service's Notice.

Interested persons may submit comments on whether the Postal Service's agreement is consistent with the policies of 39 U.S.C. 3632, 3633, or 3642. Comments are due no later than May 13, 2009. The public portions of these filings can be accessed via the Commission's Web site (http://www.prc.gov).

The Commission appoints Michael J. Ravnitzky to serve as Public Representative in the captioned filings.

It Is Ordered:

1. The Commission establishes Docket No. CP2009-29 for consideration of the matters raised in this docket.

2. Pursuant to 39 U.S.C. 505, Michael J. Ravnitzky is appointed to serve as officer of the Commission (Public Representative) to represent the interests of the general public in these proceedings.

3. Comments by interested persons in these proceedings are due no later than May 13, 2009.

4. The Secretary shall arrange for publication of this order in the Federal Register.

By the Commission.

Steven W. Williams,

Secretary.

Footnotes

1.  Notice of United States Postal Service Filing of Functionally Equivalent Global Direct Contracts Negotiated Service Agreement, May 1, 2009 (Notice).

2.  Notice at 1-2. See Docket No. MC2008-7, Request of the United States Postal Service To Add Global Plus 2 Negotiated Service Agreements to the Competitive Product List, and Notice of Filing (Under Seal) the Enabling Governors' Decision and Two Functionally Equivalent Agreements, August 8, 2008; Attachment A is a redacted version of Decision of the Governors of the United States Postal Service on the Establishment of Prices and Classifications for Global Direct, Global Bulk Economy, and Global Plus Contracts (Governors' Decision No. 08-10), July 16, 2008. The Postal Service also filed under seal an unredacted version of the Governors' Decision in that docket.

3.  PRC Order No. 153, Order Concerning Global Direct Contracts Negotiated Service Agreements, December 19, 2008.

4.  The Postal Service notes this agreement has the same one-year duration as the previously approved Global Direct Contract agreements. Notice at 5.