[Federal Register Volume 64, Number 106 (Thursday, June 3, 1999)]
[Notices]
[Pages 29931-29933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14001]


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POSTAL RATE COMMISSION

[Docket No. MC99-1; Order No. 1247]


Mail Classification Case

AGENCY: Postal Rate Commission.

ACTION: Initiation of new mail classification docket.

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SUMMARY: The Commission announces a formal mail classification docket 
to consider expansion of the legal definition of bulk parcel return 
service (BPRS). It also authorizes settlement negotiations based on a 
stipulation and agreement, request comments on expedited treatment, and 
issues other procedural rulings. These actions will allow the proposed 
expansion of BPRS eligibility to be addressed.

DATES: The deadline for intervention, comments on expedited treatment, 
and hearing requests is June 21, 1999; the prehearing conference is 
June 24, 1999. See Supplementary Information for other dates.

ADDRESSES: Address all communications regarding this notice to the 
attention of Margaret P. Crenshaw, Secretary of the Commission, 1333 H 
Street NW., Suite 300, Washington, DC 20268-0001.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
1333 H Street NW., Suite 300, Washington, DC 20268-0001.

SUPPLEMENTARY INFORMATION: On May 25, 1999, the Postal Service filed a 
request for a recommended decision approving a classification change 
expanding the terms on which it offers Bulk Parcel Return Service 
(BPRS). (Docket No. MC99-4, Bulk Parcel Return Service Expedited Minor 
Classification Case.) The request invokes expedited review under 
Commission rules for cases involving minor classification changes. See 
39 CFR 3001.69-69c. The Service notes that these rules require that 
notices of intervention, responses to proposed treatment under the 
expedited rules, and requests for a hearing be submitted within 26 days 
of the filing, or no later than June 21, 1999 in this proceeding. May 
25, 1999 Notice of United States Postal Service of the Filing of a 
Request for an Expedited Recommended Decision on a Minor Classification 
Change for BPRS.
    Contents of the filing. The request was accompanied by the 
testimony of two Postal Service witnesses (Adra and Eggleston), 
proposed amendments to the Domestic Mail Classification Schedule 
(DMCS), and an explanation of why the proposal is a minor change 
qualifying for expedited treatment. It also includes a statement 
regarding compliance with other procedural rules and a proposed 
stipulation and agreement. The Service says it filed the stipulation 
and agreement to encourage parties to consider expeditious resolution 
of this case. May 25, 1999 Notice of United States Postal Service 
Filing of Proposed Stipulation and Agreement.
    Limitations of current legal definition of BPRS. The Service's 
filing notes that as currently defined, BPRS provides a method for 
high-volume mailers to have parcels that are undeliverable-as-addressed 
(UAA)--and therefore unopened--returned to designated postal facilities 
at the original mailer's expense. To qualify for this service, UAA 
parcels must have been initially mailed under the Regular or Nonprofit 
subclasses of Standard (A) Mail. They must also be machinable (under 
one pound), carry a designated BPRS endorsement, and meet other Postal 
Service requirements. The BPRS fee is $1.75 for each returned piece.
    Proposed expansion of the definition. The Service's proposal 
expands the definition of BPRS to include qualifying parcels that are 
successfully delivered (and therefore not UAA), but then opened, 
resealed and redeposited in the mailstream by the recipient for return 
to the original mailer. The expanded definition recognizes two 
situations. One is when a qualifying parcel is returned using a mailer-
supplied BPRS return label. The other is when a qualifying parcel is 
returned with neither a mailer-supplied BPRS label nor customer-affixed 
postage, and it is impracticable or inefficient for the Service to 
return the mail piece to the recipient for payment of applicable 
postage. In both situations, the Service proposes allowing qualifying 
parcels to be handled as BPRS, with the original mailer paying the 
$1.75 BPRS fee for each returned parcel.
    In support of its proposal, the Service asserts that the requested 
change will further the general policies of efficient postal operations 
and reasonable rates and fees enunciated in the Postal Reorganization 
Act. Id. at 2 (citing 39 U.S.C. 101(a), 403(a), and 403(b)). It also 
states that the change conforms to the classification criteria of 39 
U.S.C. 3623(c). Request at 2. The Service maintains that the proposed 
change does not have any rate, fee or measurable total cost change 
implication. Id., Attachment C-10.
    Expedited review. Under rules 69-69c, requests for expedited 
consideration of a classification change characterized as minor must 
include a description of the proposed change, along with proposed 
changes in the DMCS and any pertinent rate schedules; a thorough 
explanation of the reasons why the Service characterizes the change as 
minor; and an estimate of the overall impact of the change on postal 
costs, and revenues, mail users, and competitors. The Service states 
that witness Adra provides the required description of the proposed 
classification change, notes that the proposed DMCS changes are 
provided in Attachment A to its request, and asserts that no rate or 
fee schedule changes are proposed. It also states that witnesses Adra 
and Eggleston address the Service's rationale for characterizing the 
requested change as minor in character. Id. at C-12.
    Testimony of witness Adra. Witness Adra provides an overview of the 
existing BPRS offering and discusses the Service's rationale for 
proposing the requested changes. He also reviews the proposal's 
consistency with classification criteria, describes why the case should 
be considered under the expedited rules, and identifies the proposal's 
financial impact. His discussion includes this observation about 
problems encountered under existing circumstances:

    If a customer receives a BPRS-endorsed mailpiece, opens it, then 
decides to return it, the customer should bring it to a post office 
and pay single-piece postage for return. If a customer drops an 
opened parcel in the mail without paying postage, the mailpiece 
should be returned to the customer and return postage collected. In 
reality, however, it is often more practicable or efficient for the 
Postal Service to return it to the original mailer together with the 
mailer's other BPRS parcels, with the return fee paid by that 
mailer. This is because: (1) it is inefficient for the Postal 
Service to incur the expense and difficulty of having the carrier 
return the parcel to the customer and seek payment of postage; or 
(2) it is not possible to tell that the parcel was opened; or (3) 
the fact that the parcel was opened is not discovered until the 
parcel is at or near the original mailer's delivery office. Another 
potential problem for customers is that the parcel may not always 
make it back to the original mailer. Depending on its condition, a 
parcel could be treated as dead mail and sent to a mail recovery 
center. Meanwhile, customers assume that their merchandise was 
returned and their account was credited.

USPS-T-1 at 3.
    Testimony of witness Eggleston. Witness Eggleston identifies 
relevant costing issues, discusses anticipated handling of qualifying 
parcels in terms of the cost components in a previous BPRS cost study, 
and concludes that there are no additional costs associated with 
extending the definition of BPRS to include opened and resealed 
parcels. USPS-T-2 at 2-6. Moreover, she asserts that when these opened 
and resealed parcels carry a label, they will be less costly for the 
Postal Service to process. Id. at 6.
    Proposed DMCS changes. The proposed amendments to the DMCS include 
revisions to existing sections 935.11 (the definition of BPRS) and 
935.62 (permit cancellation terms). They also include the addition of a 
new

[[Page 29933]]

section 935.36 describing the mailer-supplied return label option. The 
amendments are set out in attachments to the Service's request and the 
proposed stipulation and agreement.
    Proposed stipulation and agreement. The Service has submitted a 
proposed stipulation and agreement to encourage parties to consider 
expeditious resolution of this case. Part I (Background) provides a 
brief statement identifying the docket, filing date, and supporting 
testimony. Part II (Terms and Conditions) consists of 10 numbered 
paragraphs addressing matters such as the evidentiary record, 
consistency of the proposed agreement with applicable postal policies 
and mail classification criteria, and the extent to which signatories 
are bound by the agreement.
    Satisfaction of criteria for treatment as an expedited minor 
classification case. Witness Adra asserts that the proposal qualifies 
as an expedited minor classification change under applicable criteria 
because it does not entail any fee changes for BPRS and does not impose 
any additional restriction of eligibility. He asserts that the proposal 
does not significantly change the estimated institutional cost 
contribution of BPRS. He further states that the proposed change does 
not entail any measurable financial impact because of the small number 
of BPRS participants, the lack of any change in the BPRS fee, and the 
lack of additional costs anticipated from this classification change. 
Finally, Adra says the Service does not foresee any adverse impact from 
this proposal on mail users and competitors, and considers it 
beneficial for both mailers and recipients. In particular, he says the 
Service does not anticipate any impact on competitors, since the 
parcels affected have already been entered into the postal system. Id. 
at 7.
    Intervention. Anyone wishing to be heard in this proceeding is 
directed to file a notice of intervention with Margaret P. Crenshaw, 
Secretary of the Commission, 1333 H Street NW, Suite 300, Washington, 
DC 20268-0001 no later than June 21, 1999. Notices should indicate 
whether an intervenor will participate on a full or limited basis. See 
39 CFR 3001.20 and 3001.20a.
    Comments on proposed expedited treatment and requests for a 
hearing. Persons wishing to comment on the appropriateness of 
considering this request under the expedited rules for minor 
classification cases are directed to file comments no later than June 
21, 1999. Requests for a hearing shall also be filed no later than June 
21, 1999.
    Prehearing conference; appointment of Postal Service as settlement 
coordinator. A prehearing conference will be held on Thursday, June 24, 
1999 at 9:30 a.m. in the Commission's hearing room. The Commission asks 
that attendees be prepared to discuss not only the request for 
expedited treatment and their interest in a hearing, but also the 
status of discussions on the proposed stipulation and agreement the 
Postal Service has usefully provided with its initial filing. To 
facilitate discussion of this document, the Commission (on its own 
motion) authorizes settlement discussions in this proceeding, appoints 
the Postal Service as settlement coordinator, and requests that the 
coordinator provide a status report at (or before) the prehearing 
conference.
    Representation of the general public. In conformance with section 
3624(a) of title 39, U.S. Code, the Commission designates Ted P. 
Gerarden, director of the Commission's Office of the Consumer Advocate, 
to represent the interests of the general public in both proceedings. 
Pursuant to this designation, Mr. Gerarden will direct the activities 
of Commission personnel assigned to assist him and, upon request, 
supply their names for the record. Neither Mr. Gerarden nor any of the 
assigned personnel will participate in or provide advice on any 
Commission decision in this proceeding. The OCA shall be separately 
served with three copies of all filings, in addition to and at the same 
time as service on the Commission of the 24 copies required in section 
10(c) of the Commission's rules of practice (39 CFR 3001.10(c)).
    It is ordered:
    1. Docket No. MC99-4 is established to consider the Service's 
request for a change in Bulk Parcel Return Service.
    2. The Commission will sit en banc in this proceeding.
    3. Notices of intervention in this case shall be filed no later 
than June 21, 1999.
    4. Ted P. Gerarden, Director of the Commission's Office of the 
Consumer Advocate, is designated to represent the interests of the 
general public in this case.
    5. Comments on the appropriateness of the considering the Service's 
Docket No. MC99-4 request under Commission rules 69-69c allowing for 
expedited treatment of minor classification cases shall be filed no 
later than June 21, 1999.
    6. Requests for a hearing shall be filed no later than June 21, 
1999.
    7. A prehearing conference is scheduled for 9:30 a.m. on Thursday, 
June 24, 1999 in the Commission's hearing room.
    8. The Commission authorizes settlement discussions in this 
proceeding, and appoints the Postal Service as settlement coordinator.
    9. The settlement coordinator shall present a status report at (or 
before) the June 24, 1999 prehearing conference.
    10. The Secretary of the Commission shall arrange for publication 
of this order in the Federal Register in a manner consistent with 
applicable requirements.

    Authority: 39 U.S.C. 3623.

    Dated: May 27, 1999.
Margaret P. Crenshaw,
Secretary.
[FR Doc. 99-14001 Filed 6-2-99; 8:45 am]
BILLING CODE 7710-FW-P