[Federal Register Volume 74, Number 156 (Friday, August 14, 2009)]
[Rules and Regulations]
[Pages 41047-41051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-19504]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket No. CP2009-47; Order No. 266]
Global Plus 1 Contract
AGENCY: Postal Regulatory Commission.
[[Page 41048]]
ACTION: Final rule.
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SUMMARY: The Commission is including a new contract within the Global
Plus 1 product in the Competitive Product List. This is action
consistent with changes in a recent law governing postal operations.
Republication of the lists of market dominant products and competitive
products is also consistent with requirements in the law.
DATES: Effective August 14, 2009 and is applicable beginning July 31,
2009.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 or stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION: Regulatory History, 74 FR 36276 (July 22,
2009).
I. Introduction
II. Background
III. Comments
IV. Commission Analysis
V. Ordering Paragraphs
I. Introduction
The Postal Service proposes to add a specific Global Plus 1
contract to the Global Plus Contracts product established in Docket No.
CP2008-8. For the reasons discussed below, the Commission approves the
Postal Service's proposal.
II. Background
On July 13, 2009, the Postal Service filed a notice, pursuant to 39
CFR 3015.5, announcing that it has entered into two additional Global
Plus 1 contracts, which it states fit within the previously established
Global Plus Contracts product.\1\ The Postal Service states that each
contract is functionally equivalent to previously submitted Global Plus
1 contracts, are filed in accordance with Order No. 85, and are
supported by Governors' Decision No. 08-8 filed in Docket No. CP2008-
8.\2\ Notice at 1.
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\1\ Notice of the United States Postal Service of Filing Two
Functionally Equivalent Global Plus 1 Contracts Negotiated Service
Agreements, July 13, 2009 (Notice). While the Notice was filed
jointly in Docket Nos. CP2009-46 and CP2009-47, the Commission will
address the issues in these dockets in separate orders. The Postal
Service requests that the two contracts be included in the Global
Plus 1 product, and ``that they be considered the new `baseline'
contracts for future functional equivalency analyses. * * *'' Id. at
2.
\2\ See Docket Nos. CP 2008-8 through CP2008-10, Order
Concerning Global Plus Negotiated Service Agreements, June 27, 2008
(Order No. 85).
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The Notice also states that in Docket No. CP2008-8, the Governors
established prices and classifications for competitive products not of
general applicability for Global Plus Contracts.\3\ The Postal Service
states that the instant contract is the immediate successor contract to
Docket No. CP2008-10 which is to expire soon, which the Commission
found to be functionally equivalent in Order No. 85. Id. at 2.
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\3\ See Docket No. CP2008-8, Notice of United States Postal
Service of Governors' Decision Establishing Prices and
Classifications for Global Plus Contracts, June 2, 2008, at 1.
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The Postal Service contends that the instant contract should be
included within the Global Plus 1 product on the Competitive Product
List. Id. at 1.
In support, the Postal Service has also filed a redacted version of
the instant contract and related materials as Attachment 1-B. A
redacted version of the certified statement required by 39 CFR 3015.5
is included as Attachment 2-B. The Postal Service requests that the
instant contract ``be considered the new `baseline' contract[s] for
future functional equivalency analyses concerning this product.'' Id.
at 2.
The Postal Service filed the instant contract pursuant to 39 CFR
3015.5. The contract becomes effective August 1, 2009, unless
regulatory reviews affect that date, and has a one-year term.
The Postal Service maintains that certain portions of this contract
and certified statement required by 39 CFR 3015.5(c)(2), containing
names and identifying information of the Global Plus 1 customer,
related financial information, as well as the accompanying analyses
that provide prices, terms, conditions, and financial projections
should remain under seal. Id. at 3.
The Postal Service asserts the contract is functionally equivalent
with the contract filed in Docket No. CP2009-46 because they share
similar cost and market characteristics. It contends that they should
be classified as a single product. Id. It states that while the
existing contracts filed in Docket Nos. CP2008-9 and CP2008-10
exhibited minor distinctions, the new contracts are virtually identical
to one another. Id. at 4.
The Postal Service maintains these differences only add detail or
amplify processes included in prior Global Plus 1 contracts. It
contends because the instant contract has the same cost attributes and
methodology as well as similar cost and market characteristics the
differences do not affect the fundamental service being offered or the
essential structure of the contract. Id. at 7-8. It states the contract
is substantially similar both to the existing contract in Docket No.
CP2008-10 and to the existing Global Plus 1 contracts and should be
added to the Global Plus 1 product. Id. at 8.
In Order No. 249, the Commission gave notice of the docket,
appointed a Public Representative, and provided the public with an
opportunity to comment.\4\ On July 22, 2009, Chairman's Information
Request No. 1 (CHIR No. 1) was issued with responses due by July 27,
2009. On July 24, 2009, the Postal Service provided its responses to
CHIR No. 1.
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\4\ Notice and Order Concerning Two Functionally Equivalent
Global Plus 1 Contracts Negotiated Service Agreements, July 16, 2009
(Order No. 249).
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III. Comments
Comments were filed by the Public Representative.\5\ No other
interested parties submitted comments. The Public Representative states
the individual contracts appear to satisfy the statutory criteria, but
because of the timeframe to provide comments and information identified
in CHIR No. 1, his response is not an unqualified recommendation in
support of each contract's approval. Id. at 2. He notes that relevant
provisions of 39 U.S.C. 3632, 3633 and 3642 appear to be met by these
additional Global Plus 1 contracts. Id. The Public Representative
states that he believes the contracts are functionally equivalent to
the existing Global Plus Contracts product. He also determines that the
Postal Service has provided greater transparency and accessibility in
its filings. Id. at 3.
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\5\ Public Representative Comments in Response to Order No. 249,
July 23, 2009 (Public Representative Comments). The Public
Representative's comments jointly address the Postal Service's
filings in Docket Nos. CP2009-46 and CP2009-47.
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The Public Representative notes that the general public benefits
from the availability of these contracts in several ways: well prepared
international mail adds increased efficiency in the mailstream,
enhanced volume results in timeliness in outbound shipments to all
countries including those with small volume, and the addition of
shipping options may result in expansion of mail volumes, particularly
with the incentives for Postal Qualified Mailers (PQWs) and increased
efficiency in existing postal capacity. Id. at 4-5.
Finally, he discusses the need for self-contained docket filings.
In particular, he notes that the instant contract relies on data from
the most recent International Cost and Revenue Analysis (ICRA), which
was filed under seal in another docket. He suggests that the Postal
Service should identify the location of the ICRA utilized and cited in
that docket. Id. at 6.
IV. Commission Analysis
The Postal Service proposes to add an additional contract under the
Global
[[Page 41049]]
Plus Contracts product that was created in Docket No. CP2008-8. As
filed, this docket presents two issues for the Commission to consider:
(1) Whether the contract satisfies 39 U.S.C. 3633, and (2) whether the
contract is functionally equivalent to previously reviewed Global Plus
1 contracts. In reaching its conclusions, the Commission has reviewed
the Notice, the contract and the financial analyses provided under
seal, supplemental information, and the Public Representative's
comments.
Statutory requirements. The Postal Service contends that the
instant contract and supporting documents filed in this docket
establish compliance with the statutory provisions applicable to rates
for competitive products (39 U.S.C. 3633). Notice at 2. W. Ashley
Lyons, Manager, Regulatory Reporting and Cost Analysis, Finance
Department asserts Governors' Decision No. 08-8 for Global Plus
Contracts establishes price floor and ceiling formulas issued on May
28, 2008. He certifies that the pricing in the instant contract meets
the Governors' pricing formula and meets the criteria of 39 U.S.C.
3633(a)(1), (2) and (3). He further states that the prices demonstrate
that the contract and the included ancillary services should cover
their attributable costs, preclude the subsidization of competitive
products by market dominant products, and should not impair the ability
of competitive products on the whole to cover an appropriate share of
institutional costs. Id., Attachment 2-B.
For his part, the Public Representative indicates that the contract
appears to satisfy 39 U.S.C. 3633. Public Representative Comments at 1-
3.
Based on the review of the data submitted, including the
supplemental information, the Commission finds that the contract should
cover its attributable costs (39 U.S.C. 3633(a)(2)), should not lead to
the subsidization of competitive products by market dominant products
(39 U.S.C. 3633(a)(1)), and should have a positive effect on
competitive products' contribution to institutional costs (39 U.S.C.
3633(a)(3)). Thus, an initial review of the proposed contract indicates
that it comports with the provisions applicable to rates for
competitive products.
Functional equivalence. The Postal Service asserts that the instant
contract is functionally equivalent to the contract filed in the
companion proceeding, Docket No. CP2009-46, as well as with Global Plus
1 contracts filed previously because they share similar cost and market
characteristics. Notice at 4. The Postal Service states that the
customers under the existing and proposed contracts are the same. In
addition, it notes that existing contracts exhibited some differences,
but the contracts proposed in Docket Nos. CP2009-46 and CP2009-47 are
virtually identical. Id.
Having reviewed the contracts filed in the instant proceeding and
in Docket No. CP2009-46, and the Postal Service's justification, the
Commission finds that the two contracts may be treated as functionally
equivalent.
New baseline. The Postal Service requests that the contracts filed
in Docket Nos. CP2009-46 and 2009-47 be included in the Global Plus 1
product and ``considered the new `baseline' contracts for purposes of
future functional equivalency analyses concerning this product.''
Notice at 2. Currently, the Global Plus 1 product consists of two
existing contracts that will be superseded by the contracts in Docket
Nos. CP2009-46 and CP2009-47. Under those circumstances, the new
contracts need not be designated as a new product. Accordingly, the new
contracts in Docket Nos. CP2009-46 and CP2009-47 will be included in
the Global Plus 1 product and become the ``baseline'' for future
functional equivalency analyses regarding that product.
Self-contained docket filings. The Public Representative reiterates
a point made in Order No. 247 regarding the need for self-contained
docket filings. In particular, he points to the difficulty in obtaining
ICRA data relied on to support the instant contract but filed under
seal in another docket. He suggests that ``filings that reference the
ICRA should include a pointer to the location of the ICRA utilized and
cited in that docket.'' Public Representative Comments at 6.
The Public Representative point is well taken. The Commission does
not wish to burden the Postal Service with extraneous filing
requirements, nor does it intend for the process of reviewing Postal
Service filings to become labyrinthine. Recognizing that Postal Service
filings are electronic, the Commission will adopt the following policy:
(1) The redacted Governors' Decision on which the contract is based
should be included with the filing; (2) an html link should be provided
to the document filed by the Postal Service that notices that the
unredacted Governors' Decision is being filed under seal; and (3) all
other confidential data relied on to support the specific contract
should be filed in the docket in which that specific contract is filed.
Other considerations. If the agreement terminates earlier than
anticipated, the Postal Service shall promptly inform the Commission of
the new termination date.
In conclusion, the Commission finds that the negotiated service
agreement submitted in Docket No. CP2009-47 is appropriately included
within the Global Plus Contracts product.
V. Ordering Paragraphs
It is ordered:
1. The contract filed in Docket No. CP2009-47 is included within
the Global Plus 1 product (CP2008-8 and CP2009-47).
2. The existing Global Plus 1 product (CP2008-9 and CP2008-10) is
removed from the product list.
3. As discussed in the body of this order, future contract filings
which rely on materials filed under seal in other dockets should be
self contained.
4. The Postal Service shall notify the Commission if the
termination date changes as discussed in this order.
List of Subjects in 39 CFR Part 3020
Administrative practice and procedure, Postal Service.
Issued: July 31, 2009.
By the Commission.
Judith M. Grady,
Acting Secretary.
0
For the reasons stated in the preamble, under the authority at 39
U.S.C. 503, the Postal Regulatory Commission amends 39 CFR part 3020 as
follows:
PART 3020--PRODUCT LISTS
0
1. The authority citation for part 3020 continues to read as follows:
Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.
0
2. Revise Appendix A to Subpart A of Part 3020--Mail Classification
Schedule to read as follows:
Appendix A to Subpart A of Part 3020--Mail Classification Schedule
Part A--Market Dominant Products
1000 Market Dominant Product List
First-Class Mail
Single-Piece Letters/Postcards
Bulk Letters/Postcards
Flats
Parcels
Outbound Single-Piece First-Class Mail International
Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
High Density and Saturation Letters
High Density and Saturation Flats/Parcels
Carrier Route
Letters
Flats
Not Flat-Machinables (NFMs)/Parcels
Periodicals
Within County Periodicals
[[Page 41050]]
Outside County Periodicals
Package Services
Single-Piece Parcel Post
Inbound Surface Parcel Post (at UPU rates)
Bound Printed Matter Flats
Bound Printed Matter Parcels
Media Mail/Library Mail
Special Services
Ancillary Services
International Ancillary Services
Address List Services
Caller Service
Change-of-Address Credit Card Authentication
Confirm
International Reply Coupon Service
International Business Reply Mail Service
Money Orders
Post Office Box Service
Negotiated Service Agreements
HSBC North America Holdings Inc. Negotiated Service Agreement
Bookspan Negotiated Service Agreement
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Inbound International
Canada Post--United States Postal Service Contractual Bilateral
Agreement for Inbound Market Dominant Services
Market Dominant Product Descriptions
First-Class Mail
[Reserved for Class Description]
Single-Piece Letters/Postcards
[Reserved for Product Description]
Bulk Letters/Postcards
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Parcels
[Reserved for Product Description]
Outbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Inbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Standard Mail (Regular and Nonprofit)
[Reserved for Class Description]
High Density and Saturation Letters
[Reserved for Product Description]
High Density and Saturation Flats/Parcels
[Reserved for Product Description]
Carrier Route
[Reserved for Product Description]
Letters
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Not Flat-Machinables (NFMs)/Parcels
[Reserved for Product Description]
Periodicals
[Reserved for Class Description]
Within County Periodicals
[Reserved for Product Description]
Outside County Periodicals
[Reserved for Product Description]
Package Services
[Reserved for Class Description]
Single-Piece Parcel Post
[Reserved for Product Description]
Inbound Surface Parcel Post (at UPU rates)
[Reserved for Product Description]
Bound Printed Matter Flats
[Reserved for Product Description]
Bound Printed Matter Parcels
[Reserved for Product Description]
Media Mail/Library Mail
[Reserved for Product Description]
Special Services
[Reserved for Class Description]
Ancillary Services
[Reserved for Product Description]
Address Correction Service
[Reserved for Product Description]
Applications and Mailing Permits
[Reserved for Product Description]
Business Reply Mail
[Reserved for Product Description]
Bulk Parcel Return Service
[Reserved for Product Description]
Certified Mail
[Reserved for Product Description]
Certificate of Mailing
[Reserved for Product Description]
Collect on Delivery
[Reserved for Product Description]
Delivery Confirmation
[Reserved for Product Description]
Insurance
[Reserved for Product Description]
Merchandise Return Service
[Reserved for Product Description]
Parcel Airlift (PAL)
[Reserved for Product Description]
Registered Mail
[Reserved for Product Description]
Return Receipt
[Reserved for Product Description]
Return Receipt for Merchandise
[Reserved for Product Description]
Restricted Delivery
[Reserved for Product Description]
Shipper-Paid Forwarding
[Reserved for Product Description]
Signature Confirmation
[Reserved for Product Description]
Special Handling
[Reserved for Product Description]
Stamped Envelopes
[Reserved for Product Description]
Stamped Cards
[Reserved for Product Description]
Premium Stamped Stationery
[Reserved for Product Description]
Premium Stamped Cards
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description][FEDREG][VOL]*[/VOL][NO]*[/
NO][DATE]*[/DATE][RULES][RULE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/
SUBJECT][/PREAMB][SUPLINF][HED]*[/HED][REGTEXT][EXTRACT][P]*[/P]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
Address List Services
[Reserved for Product Description]
Caller Service
[Reserved for Product Description]
Change-of-Address Credit Card Authentication
[Reserved for Product Description]
Confirm
[Reserved for Product Description]
International Reply Coupon Service
[Reserved for Product Description]
International Business Reply Mail Service
[Reserved for Product Description]
Money Orders
[Reserved for Product Description]
Post Office Box Service
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Class Description]
HSBC North America Holdings Inc. Negotiated Service Agreement
[Reserved for Product Description]
Bookspan Negotiated Service Agreement
[Reserved for Product Description]
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Part B--Competitive Products
2000 Competitive Product List
Express Mail
Express Mail
Outbound International Expedited Services
Inbound International Expedited Services
Inbound International Expedited Services 1 (CP2008-7)
Inbound International Expedited Services 2 (MC2009-10 and
CP2009-12)
Priority Mail
Priority Mail
Outbound Priority Mail International
Inbound Air Parcel Post
Royal Mail Group Inbound Air Parcel Post Agreement
Parcel Select
Parcel Return Service
International
International Priority Airlift (IPA)
International Surface Airlift (ISAL)
International Direct Sacks--M-Bags
Global Customized Shipping Services
Inbound Surface Parcel Post (at non-UPU rates)
Canada Post--United States Postal service Contractual Bilateral
Agreement for Inbound Competitive Services (MC2009-8 and CP2009-9)
International Money Transfer Service
International Ancillary Services
Special Services
Premium Forwarding Service
Negotiated Service Agreements
Domestic
Express Mail Contract 1 (MC2008-5)
Express Mail Contract 2 (MC2009-3 and CP2009-4)
Express Mail Contract 3 (MC2009-15 and CP2009-21)
Express Mail Contract 4 (MC2009-34 and CP2009-45)
Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
14)
Express Mail & Priority Mail Contract 3 (MC2009-13 and CP2009-
17)
Express Mail & Priority Mail Contract 4 (MC2009-17 and CP2009-
24)
Express Mail & Priority Mail Contract 5 (MC2009-18 and CP2009-
25)
Express Mail & Priority Mail Contract 6 (MC2009-31 and CP2009-
42)
Express Mail & Priority Mail Contract 7 (MC2009-32 and CP2009-
43)
Express Mail & Priority Mail Contract 8 (MC2009-33 and CP2009-
44)
Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
Priority Mail Contract 1 (MC2008-8 and CP2008-26)
[[Page 41051]]
Priority Mail Contract 2 (MC2009-2 and CP2009-3)
Priority Mail Contract 3 (MC2009-4 and CP2009-5)
Priority Mail Contract 4 (MC2009-5 and CP2009-6)
Priority Mail Contract 5 (MC2009-21 and CP2009-26)
Priority Mail Contract 6 (MC2009-25 and CP2009-30)
Priority Mail Contract 7 (MC2009-25 and CP2009-31)
Priority Mail Contract 8 (MC2009-25 and CP2009-32)
Priority Mail Contract 9 (MC2009-25 and CP2009-33)
Priority Mail Contract 10 (MC2009-25 and CP2009-34)
Priority Mail Contract 11 (MC2009-27 and CP2009-37)
Priority Mail Contract 12 (MC2009-28 and CP2009-38)
Priority Mail Contract 13 (MC2009-29 and CP2009-39)
Priority Mail Contract 14 (MC2009-30 and CP2009-40)
Outbound International
Direct Entry Parcels Contracts
Direct Entry Parcels 1 (MC2009-26 and CP2009-36)
Global Direct Contracts (MC2009-9, CP2009-10, and CP2009-11)
Global Expedited Package Services (GEPS) Contracts
GEPS 1 (CP2008-5, CP2008-11, CP2008-12, and CP2008-13, CP2008-
18, CP2008-19, CP2008-20, CP2008-21, CP2008-22, CP2008-23, and
CP2008-24)
Global Plus Contracts
Global Plus 1 (CP2008-8, CP2008-46 and CP2009-47)
Global Plus 2 (MC2008-7, CP2008-16 and CP2008-17)
Inbound International
Inbound Direct Entry Contracts with Foreign Postal
Administrations (MC2008-6, CP2008-14 and CP2008-15)
International Business Reply Service Competitive Contract 1
(MC2009-14 and CP2009-20)
Competitive Product Descriptions
Express Mail
[Reserved for Group Description]
Express Mail
[Reserved for Product Description]
Outbound International Expedited Services
[Reserved for Product Description]
Inbound International Expedited Services
[Reserved for Product Description]
Priority
[Reserved for Product Description]
Priority Mail
[Reserved for Product Description]
Outbound Priority Mail International
[Reserved for Product Description]
Inbound Air Parcel Post
[Reserved for Product Description]
Parcel Select
[Reserved for Group Description]
Parcel Return Service
[Reserved for Group Description]
International
[Reserved for Group Description]
International Priority Airlift (IPA)
[Reserved for Product Description]
International Surface Airlift (ISAL)
[Reserved for Product Description]
International Direct Sacks--M-Bags
[Reserved for Product Description]
Global Customized Shipping Services
[Reserved for Product Description]
International Money Transfer Service
[Reserved for Product Description]
Inbound Surface Parcel Post (at non-UPU rates)
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
International Insurance
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Group Description]
Domestic
[Reserved for Product Description]
Outbound International
[Reserved for Group Description]
Part C--Glossary of Terms and Conditions [Reserved]
Part D--Country Price Lists for International Mail [Reserved]
[FR Doc. E9-19504 Filed 8-13-09; 8:45 am]
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