[Federal Register Volume 64, Number 227 (Friday, November 26, 1999)]
[Proposed Rules]
[Pages 66436-66441]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30711]


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POSTAL RATE COMMISSION

39 CFR Part 3001

[Docket No. IM2000-1; Order No. 1270]


International Mail Report

AGENCY: Postal Rate Commission.

ACTION: Notice of proposed international mail rulemaking.

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SUMMARY: This document announces a new docket to develop permanent 
rules related to the analysis of cost, revenue and volume data 
generated by the Postal Service's various international mail services. 
It also reviews responses to previous orders on this issue, sets forth 
a proposed rule, and invites public comment. Adoption of permanent 
rules will assist the Commission in preparing annual reports to 
Congress, as required by law.

DATES: Submit initial comments on or before December 27, 1999. Submit 
reply comments on or before January 10, 2000.

ADDRESSES: Send comments to Margaret P. Crenshaw, Secretary, Postal 
Rate Commission, 1333 H St. NW., Suite 300, Washington, DC 20268-0001.

FOR MORE INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
1333 H St. NW., Washington, DC 20268-0001 at 202-789-6820.

SUPPLEMENTARY INFORMATION:

Regulatory History

    On January 26, 1999, Commission Order No. 1226 in Docket No. IM99-1 
was published in the Federal Register (64 FR 3991). Comments received 
in response to that order are discussed in the preamble. On June 30, 
1999, the Commission issued its initial annual report to the Congress 
on international mail costs, revenues, and volumes. That report, and a 
series of orders related to its issuance, are also discussed in the 
preamble.

Background

    On October 21, 1998, Public Law 105-277 was signed into law, adding 
section 3663 to the Postal Reorganization Act [39 U.S.C. 3663]. It 
requires that by July 1 of each year, the Commission ``transmit to each 
House of Congress a comprehensive report of the costs, revenues, and 
volumes'' accrued by the Postal Service ``in connection with mail 
matter conveyed between the United States and other countries'' for the 
prior fiscal year. To enable the Commission to carry out that 
directive, section 3663 requires the Postal Service to provide, by 
March 15, ``such data as the Commission may require'' to prepare that 
report. It states that the data provided ``shall be in sufficient 
detail to enable the Commission to analyze the costs, revenues, and 
volumes for each international mail product or service, under the 
methods determined appropriate by the Commission for analysis of rates 
for domestic mail.''

Initial United Parcel Service Petition for Rulemaking

    On December 16, 1998, United Parcel Service (UPS) asked the 
Commission to institute a rulemaking in order to determine ``(1) the 
data to be provided to the Commission by the United States Postal 
Service and (2) the methods to be used by the Commission in analyzing 
the costs, revenues, and volumes of each international mail product'' 
to prepare the report required by section 3663. Petition of UPS to 
Institute Rulemaking Proceeding to Study International Costs and 
Revenues, filed December 16, 1998, at 3.
    In support of its petition, UPS asserted that it has a vital 
interest in ensuring that the Postal Service's international products 
with which it competes are not subsidized by other Postal Service 
offerings. It observed that analyzing the costs, volumes, and revenues 
of international mail is a new responsibility for the Commission, and 
argued that in deciding what data and what methods to use, the 
Commission is

[[Page 66437]]

likely to benefit from the input of interests affected by international 
mail.

Commission Response

    The Commission declined to institute the rulemaking that UPS 
requested, concluding that there was too little time to complete 
traditional rulemaking procedures before the March 15 deadline 
specified in the statute for obtaining international mail data from the 
Postal Service. The Commission observed, however, that section 3663 
contemplates an ongoing responsibility of the Commission to analyze 
international mail costs and revenues, and, therefore, it may be 
appropriate to adopt permanent rules concerning data that the Postal 
Service should provide to enable the Commission to carry out this 
responsibility. See order no. 1226 at 2.
    In order no. 1226, the Commission informally solicited comments 
from the public concerning what data the Postal Service should provide 
to enable the Commission to prepare the report required by section 
3663, and what level of detail would be appropriate for reporting the 
costs, revenues, and volumes of international mail services. Id. at 3. 
The order concluded that the data on which the report is based should 
consist, at a minimum, of the International Cost and Revenue Analysis 
(ICRA), and the international equivalent of the Cost Segments and 
Components (CSC) report that is provided for domestic mail. Id. at 3. 
The Commission included in this order a proposed list of some 20 
outbound and three inbound international postal services for which 
financial data would be separately analyzed and reported.

Summary of Comments

    The comments received reflected a wide range of views. The 
Advertising Mail Marketing Association (AMMA) argued that international 
rates are not neatly aligned with economic costs and demand and, 
therefore, analyzing the cost coverages of individual international 
services serves little purpose. AMMA contended that international rate 
groups are often misaligned with economic costs because UPU 
classifications are overbroad, and terminal dues and other charges set 
by international agreement have arbitrary elements. AMMA Comments at 1-
2 (January 29, 1999). AMMA argued that financial data for individual 
outbound services cannot be meaningfully combined with data for related 
inbound services. Id. at 3. It also argued that there is no non-
arbitrary way to disaggregate transportation costs or terminal dues to 
the rate category level for outbound services. Id. at 4. Because the 
costs, revenues, and volumes of international mail can be meaningfully 
analyzed only in the aggregate, AMMA contended, that is all section 
3663 requires. AMMA argued that no new data are needed to perform such 
an analysis.
    UPS. UPS argued that the purpose of section 3663 is to assure the 
Postal Service's competitors and the public that the Postal Service's 
international mail services are covering their costs and making a 
reasonable contribution to overhead. To accomplish that purpose, it 
argued, the Postal Service should do the following: describe its 
international costing systems and methods and provide the relevant 
handbooks; attribute to each service the costs of accounting, 
advertising, electronic customs clearance, and private delivery 
contractors (UPS Comments at 4 (January 29, 1999)); disaggregate 
financial data to the rate category level for services that have 
relatively large volumes or face intense competition, such as IPAS and 
Global Priority Mail (id. at 2-3); and provide financial data for 
individual services for outbound and inbound flows combined, by country 
pair (id. at 5).
    Federal Express (FedEx) argued that the costs of international mail 
vary radically by global region and by terminal dues regime, and that 
the characteristics of mail vary by destination. Therefore, it argued, 
financial data should be analyzed and reported for the seventy-plus 
categories of international service to which a separate tariff applies. 
FedEx Comments at 3 and Appendix A (February 1, 1999). It recognized 
cost data cannot be reliably disaggregated for some of these 
categories, but argued that allocations should be made on the basis of 
pieces and/or weight, in order to evaluate the adequacy of the rate 
charged. FedEx Reply Comments at 2-3 (February 8, 1999). It argued 
that, at a minimum, financial data should be separately reported for 
services to Canada and Mexico. FedEx Comments at 6. FedEx contended 
that the combined costs of outward and inward mail flows for specific 
international services must be reported, because terminal dues do not 
reflect the economic value of inbound delivery. Id. at 7-8. It also 
urged that historical financial data be provided so that any anomalies 
in the data can be identified. It also urged the Commission to analyze 
and report all costs that are incurred by international mail as a 
whole, even if they cannot be attributed to individual services. Id. at 
9.
    Office of the Consumer Advocate (OCA). The comments of the OCA 
described the regulatory and legislative background that it believes 
led to the adoption of section 3663. It cited the fears of the 
competitors of the Postal Service's international mail services that 
the Postal Service is subsidizing its international mail services from 
revenues generated by its monopoly products. The OCA argued that the 
legislative purpose underlying section 3663 was to allay those fears by 
making public all financial data relevant to the Postal Service's 
international mail services. The OCA argued that the Postal Service 
should be required to provide all of the fiscal year (FY) 1998 
financial data generated by its ongoing international mail data 
collection systems, and, in addition, special information and reports 
that indicate that there are international mail services that do not 
cover their costs. These, it said, include the information that the 
Postal Service furnished to the Postal Service's Inspector General and 
to the General Accounting Office (GAO) to support their recent 
investigations of international mail--the Inspector General's report 
itself and the Postal Service's 1998 marketing plans for international 
mail. OCA Comments at 7-16 (January 29,1999).
    Postal Service. While it ``basically agrees'' with AMMA's position, 
the Postal Service did not oppose many of the recommendations that it 
provide more detailed data on international mail. Postal Service 
Comments at 4 (January 29, 1999). The Postal Service argued that Air M-
bags, Valuepost/Canada, and Bulk Letter Service to Canada, are minor 
variants of Air AO, Surface AO, and Air LC, respectively, and therefore 
should be analyzed and reported as part of those broader services. It 
observed that financial data about these services are country-specific, 
and should not be publicly reported for that reason as well. Id. at 2-
3. It argued that data on post cards, postal cards, and aerograms 
should be combined because their cost and market characteristics are 
similar, and their volumes are too low to yield reliable data 
separately. Id. at 4.
    The Postal Service noted the parcel companies' argument that cost 
coverages should be separately analyzed for rate categories within 
subclasses, such as those within International Priority Airmail (IPA) 
and Global Priority Mail. It responded that the statistical sample 
representing IPA and Global Priority Mail is too small to be further 
separated into its constituent rate categories and still yield reliable 
results. It asserted that it does not collect costs separately for the 
rate categories within IPA. Id. at 7-8.

[[Page 66438]]

    Commission response. The Commission considered these comments in 
formulating its list of initial data requirements in order no. 1228. 
The Commission concluded that section 3663 appeared to contemplate that 
international services would be separately analyzed and reported on 
much the same basis that the Commission uses to analyze costs and cost 
coverages for domestic mail. Consistent with that conclusion, the 
Commission asked the Postal Service to describe how it designs rates 
for its international services, and to provide financial data 
separately for each international service for which it sets rates by 
marking up the costs that it separately attributes to that service. 
Order No. 1228 at 6-7. The Commission tentatively concluded that the 
arguments for combining outbound with analogous inbound services before 
analyzing and reporting their attributable costs and cost coverages 
were not persuasive. Id. at 8. The Commission issued a series of six 
notices of data requirements asking the Postal Service to supplement or 
clarify its responses to order no. 1228.

Initial Commission Report

    The Commission's initial section 3663 report. The Commission issued 
its first report under section 3663 on June 30, 1999. It was based 
primarily on information contained in the ICRA and on the supporting 
information provided in response to order nos. 1228 and 1236. The main 
body of the report presented costs, volumes, revenues, and cost 
coverages separately for fourteen outbound services and seven inbound 
services. For FY 1998 it showed an overall cost coverage for 
international mail of 112.9 percent, reflecting a cost coverage for 
outbound international mail of 130.6 percent, and a cost coverage for 
inbound international mail of 98.2 percent. Within outbound 
international mail, the cost coverage for air and for surface services 
was 152.6 and 96.4 percent, respectively. The collective cost coverage 
for the outbound ``initiatives'' was 86.8 percent. Appendix E further 
disaggregated these service-specific costs, volumes, revenues, and cost 
coverages by terminal dues regime. This had the incidental effect of 
isolating these data by a geographic region (the European bilaterals) 
and two countries (Canada and Mexico).
    The cost coverages for outbound air services and for international 
services overall were significantly increased when the Postal Service 
revised its method of estimating international air costs. The cost 
coverage for international mail overall was further increased when the 
Postal Service eliminated the so-called ``settlement difference.'' The 
Postal Service submitted its FY 1998 ICRA-USPS version on June 7, 1999 
containing these revised cost estimation methods. Because there was not 
sufficient time for the Commission to fully evaluate these revised 
methods before its July 1 reporting deadline, the Commission presented 
financial data based on these revisions in Appendix F.
    The Commission's report evaluated the accuracy and reliability of 
the financial data provided by the Postal Service, and provided 
estimates of their statistical precision. The Commission concluded that 
its outbound international volume and revenue data is quite reliable, 
in part because the Postal Service collects a substantial amount of 
census data on international mail, and has sample data from multiple 
collection systems to serve as control numbers. Its inbound volume and 
revenue is reliable as well, with some possible exceptions noted in the 
report. The report provides coefficients of variation for the volumes 
and unit attributable costs of the Postal Service's individual 
international services. The report concludes that except for several 
inbound services, statistically significant conclusions about the cost 
coverages of individual international services can be drawn.

Congressional Request for Additional Information

    On August 3, 1999, Representative John McHugh, chairman of the 
Subcommittee on the Postal Service of the Committee on Government 
Reform of the U.S. House of Representatives, submitted requests for 
additional information to the Commission prompted by its first section 
3663 report. Among the additional information requested was a revised 
Appendix E showing combined data for outbound and inbound mail flows by 
international service. Representative McHugh also requested that the 
Commission estimate the difference between terminal dues revenue 
received by the Postal Service for delivering inbound mail and the 
revenues that the Postal Service would have collected from comparable 
domestic mail, calculated separately for mail received from Canada, the 
European bilateral group, and other Universal Postal Union 
industrialized countries. The Commission provided responses on 
September 29, 1999.

Public Disclosure

    Controversy arose early in the reporting process over the 
commercial sensitivity of the data that the Postal Service provided on 
international mail, and whether public disclosure of such data was 
contemplated by section 3663. The Postal Service accompanied its March 
15 submission of the ICRA and supporting materials to the Commission 
with a cover letter which asserted that most of the materials they 
contained were commercially sensitive internal documents that, ``under 
good business practice,'' would not be disclosed. This was a reference 
to section 410(c)(2) of the Postal Reorganization Act, which provides 
that the Freedom of Information Act (FOIA) shall not require the Postal 
Service to disclose ``information of a commercial nature, including 
trade secrets * * * which under good business practice would not be 
publicly disclosed.'' The Postal Service argued that it competes with 
the courier companies in the market for outbound expedited parcels and 
with foreign postal administrations in the market for bulk outbound 
letters. It asserted that because this competition is intense, most 
financial data about individual international services comes under this 
statutory non-disclosure provision. It noted that section 3663 requires 
only that the Commission's report be submitted to each house of 
Congress, and contains no language indicating a requirement that the 
report be publicly disclosed.
    The Postal Service anticipated that the Commission would receive 
FOIA requests for the international mail data that the Postal Service 
provided. The Postal Service urged the Commission to process such 
requests according to Department of Justice guidelines, which recommend 
that FOIA requests for documents that originated in another agency be 
referred to the originating agency for processing, or that the 
originating agency be consulted before releasing such documents.
    Shortly after the Postal Service provided its ICRA and supporting 
materials to the Commission, UPS filed a motion to gain access to them. 
Motion of UPS to Provide Public Access to International Data Requested 
in Order No. 1228 and for Opportunity to Provide Public Comment, filed 
March 26, 1999. Although its motion was not a FOIA request, UPS argued 
that disclosing international mail data was consistent with the broad 
national policy favoring disclosure of government records that 
underlies the FOIA. UPS asserted that the Commission's report would 
benefit from the input of parties affected by

[[Page 66439]]

international mail, and argued that any commercial harm from disclosure 
could be avoided by imposing appropriate protective conditions. UPS 
Motion at 2-3.
    In reply, the Postal Service noted that section 410(c)(2) of the 
Act expressly shields commercially sensitive records in its possession 
from disclosure under the FOIA. It argued that there is nothing in the 
language of section 3663 to indicate that Congress intended it to 
override section 410(c)(2), or intended to subject commercially 
sensitive international mail data to the public hearing requirements 
that apply to data used to set domestic mail rates. USPS Response to 
Motion of UPS to Provide Public Access to International Mail Data 
Requested in Order No. 1228 and for Opportunity to Provide Public 
Comment, filed April 5, 1999, at 1-6.
    The Postal Service asserted that the value of public input would be 
outweighed by the commercial harm that disclosure of detailed financial 
data on international mail would cause. Since none of its international 
services enjoys monopoly protection, it argued, detailed financial 
information about international mail is more commercially sensitive 
than comparable information is for domestic mail. It argued that it 
would be premature to publicly disclose such information before the 
implications of doing so are explored in rulemaking proceedings. Id at 
6-7.

Commercial Sensitivity

    The Postal Service identified three kinds of commercial information 
that it viewed as particularly sensitive. It argued that country-
specific costs, volumes, and revenues were sensitive because most of 
the volume of outbound international mail comes from only a handful of 
large customers, and the identity of those customers could be inferred 
from country-specific volume and revenue data. Disclosing country-
specific costs, it argued, would allow competitors to know how far the 
Postal Service could go to match price-cutting by competitors. Comments 
of the United States Postal Service on the Commission's 39 U.S.C. 3663 
Report, filed April 8, 1999, (April 8 Memo) at 3-5.
    The Postal Service argued that many of its charges for delivering 
inbound mail are negotiated with foreign postal administrations, and 
that disclosing cost data for such inbound delivery would reduce its 
negotiating room with those administrations. Id. at 4. Finally, it 
asserted, its so-called international ``initiatives'' (Global Package 
Link, Global Priority Mail, Global Parcel Services, Direct Entry/
Inbound, and International Customized Mail) are recently introduced 
experimental services that are especially sensitive to the pressures of 
competitors. Disclosing product-specific financial information, it 
argued, would reveal the vulnerabilities of individual initiatives to 
its competitors. Id. at 6.
    The Commission rejected UPS's motion to make public the data 
obtained by order No. 1228. The Commission noted that Congress must be 
presumed to have been aware of the explicit withholding provision of 
section 410(c)(2) and yet it provided no indication in the language or 
the legislative history of section 3663 that it intended section 3663 
to override that provision. The Commission concluded that section 3663 
was not intended to alter existing disclosure law contained in the 
Postal Reorganization Act or the Administrative Procedure Act. Order 
No. 1245 at 4.
    After the Commission issued its section 3663 report, it received 
FOIA requests for a copy of the report and the source documents 
provided by the Postal Service. The Commission asked the Postal Service 
to indicate which portions of the report it believed should be redacted 
as commercially sensitive, and to explain the basis for its belief. The 
Postal Service responded with a memorandum that cited several Federal 
district court cases which conclude that section 410(c)(2), which 
authorizes the Postal Service to withhold commercial information that 
would be withheld ``under good business practice,'' is a specific 
statutory exemption from the FOIA's mandatory disclosure requirements. 
USPS Memorandum Concerning Categories of Information that Should be 
Deleted from Commission Report to Congress on International Mail Costs, 
Volumes, and Revenues, filed July 21, 1999, at 9-14 (July 21 Memo). For 
the reasons cited in its April 8 Memo, the Postal Service argued that 
several categories of information in the Commission's report met the 
``good business practice'' standard of section 410(c)(2). These 
included costs and cost coverages for individual outbound services, and 
information from which such costs can be derived; service-specific 
costs disaggregated by component; costs, revenues, and volumes for 
individual ``initiatives''; costs, revenues, and volumes specific to a 
country or country group for individual outbound services, and costs 
for inbound services for which the Postal Service negotiates inbound 
delivery charges with individual countries, or sets them unilaterally 
by country group. July 21 Memo at 5-8. The Commission accepted most of 
the Postal Service's arguments, and provided those filing FOIA requests 
with copies of its report that had been redacted in a manner that was 
largely consistent with those arguments. See, e.g., Letter of Margaret 
Crenshaw, Secretary, Postal Rate Commission, to John McKeever, Piper 
and Marbury, dated July 29, 1999.

Challenge to Redacted Report

    Piper and Marbury appealed the Commission's decision to provide it 
with a redacted copy of its section 3663 report, challenging the 
Commission's interpretation of the cases cited in the Postal Service's 
July 21 memo. [Piper and Marbury] Appeal on Partial Denial of Freedom 
of Information Act Request for Report Under 39 U.S.C. 3663, filed 
August 18, 1999.
    The Commission denied Piper and Marbury's appeal, adhering to its 
interpretation of the relevant case law. See order no. 1261, issued 
September 15, 1999. Piper and Marbury also had requested a copy of all 
information supplied by the Postal Service that the Commission used to 
prepare its section 3663 report. The Postal Service asked the 
Commission to respond to this request by distinguishing between 
information in answers developed by the Postal Service in response to 
Commission questions, and information in records that were developed 
solely for the Postal Service's internal use.
    With respect to information developed to answer Commission 
questions, the Postal Service identified categories in addition to 
those already specified in its July 21 Memo that it believed should be 
withheld under the ``good business practice'' standard of section 
410(c)(2). The additional categories were: product-specific pricing 
strategy information, detailed product-specific postal operational 
information, and detailed information on revenue protection procedures. 
The Postal Service indicated specific redactions of the information 
developed to answer Commission questions that it believes come under 
this expanded list of sensitive categories. See Letter of William T. 
Johnstone, Managing Counsel, International and Ratemaking Law, United 
States Postal Service, to Margaret P. Crenshaw, Secretary, Postal Rate 
Commission, dated August 13, 1999.
    With respect to records developed solely for the Postal Service's 
internal use, the Postal Service proposed that the Commission refer 
that part of the Piper and Marbury request back to the Postal Service 
for direct processing. The Postal Service argued that this practice is 
widely followed by Federal government

[[Page 66440]]

agencies and is consistent with the FOIA guidelines articulated by the 
Justice Department's Office of Information Policy (OIP). Id. at 2-4. 
The Commission chose to retain responsibility for processing FOIA 
requests for such records, but to consult closely with the Postal 
Service, which is another option that is consistent with the OIP 
guidelines. The Commission reaffirmed its request that the Postal 
Service review all of the records that it provided to the Commission as 
part of the section 3663 reporting process, identify the specific 
portions that it believed should be redacted, and explain the reasons 
for its belief. Letter of Margaret P. Crenshaw, Secretary, Postal Rate 
Commission, to Mary Elcano, General Counsel, United States Postal 
Service, dated August 24, 1999. The Commission will complete its 
processing of this part of the Piper and Marbury FOIA request when it 
receives the Postal Service's response.

Invitation for Comments

    Interested persons are invited to comment on the Commission's 
initial effort to satisfy the requirements of 39 U.S.C. 3663. They may 
wish to comment, for example, on the adequacy of the information upon 
which the Commission's first international mail report was based. The 
Commission has drafted proposed rule 103 [39 CFR 3001.103], set forth 
below [Attachment A to the Notice]. Proposed rule 103 would add to the 
Commission's periodic reporting rules a list of items to be included in 
the Postal Service's data submission that must be filed by March 15 of 
each year, under section 3663(b). Comments on this proposed rule are 
invited.
    Among the items listed as necessary to satisfy section 3663(b) are 
the CRA and CSC reports. These reports must be prepared by the Postal 
Service before it can prepare the ICRA report. The Commission needs 
them in order to verify the accuracy of various aspects of the ICRA 
report, including total international mail costs, and the domestic 
portion of transportation, processing, and delivery costs incurred by 
international mail services. Under proposed rule 103, if the Postal 
Service cannot include audited versions of the CRA and CSC reports with 
the ICRA that it files on March 15 of each year, it must include the 
unaudited versions that it used to prepare the ICRA.
    Currently, the Postal Service has a duty under rule 102(a) to 
provide the Commission with audited versions of the CRA and CSC 
``within two of weeks of [their] presentation for use by postal 
management.'' The date the Postal Service has filed these reports has 
varied, and the audited versions might arrive too late to assist the 
Commission in preparing the report on international mail required by 
section 3663, which is due on July 1 of each year. Accordingly, if the 
Postal Service has not already provided audited versions of the CRA and 
CSC in response to rule 102(a) by May 15 of a given year, the Postal 
Service would be required by proposed rule 103 to provide them by that 
date to allow the Commission sufficient time to reflect them in its 
section 3663 report.
    In addition to commenting on the adequacy of the data that the 
Postal Service is to provide under section 3663(b), interested persons 
may wish to comment on the appropriate scope and detail of the 
Commission's annual international mail report itself. They may wish to 
comment, for example, on the analytical methods applied by the 
Commission to calculate the volumes, costs, and revenues of 
international mail services. Specifically, they may wish to comment on 
the revisions that the Postal Service made to its methods for 
calculating the settlement difference and attributable international 
air transportation costs in its FY 1998 ICRA Report--USPS Version, 
filed June 7, 1999. In the PRC versions of the FY 1998 ICRA Report, the 
difference between actual and accrued settlement expenses was treated 
as an incremental cost to international mail as a whole. The accrued 
international air transportation costs were used to adjust the imputed 
attributable international air transportation cost by service to the 
accrued level. As noted above, the Postal Service eliminated the 
settlement difference cost, and revised international air costs by 
service to reflect only the actual payment to airlines in the 1998 ICRA 
Report--USPS Version. See Appendix F of the Commission's report.
    The Commission's preliminary view is that it would be appropriate 
to incorporate these revised methods in the FY 1999 ICRA Report to be 
filed March 15, 2000, since the accrued expenses do not reflect the 
actual monies paid out in the year under study. The Commission, 
however, is interested in the views of others concerning these revised 
methods. The Commission also invites the Postal Service to review 
Appendix F of the Commission's report and provide any comments it might 
have on the accuracy of the Commission's description of its former and 
revised methods, and provide any additional explanations for the 
revisions that it might deem appropriate.
    As noted above, the Postal Service expressed its belief that it 
would be helpful to use rulemaking procedures to explore the 
implications of making commercial information about its international 
mail services public. Interested persons are invited to comment on the 
procedures that should be employed to determine which portions of the 
report or supporting documents should not be publicly disclosed, what 
criteria or standards should govern that determination, what categories 
of commercial information meet those standards, and the basis for that 
belief.
    Finally, the Commission invites comments on any other issues that 
interested persons consider relevant to the Commission's duty to 
analyze and report on international mail costs, volumes, and revenues 
under section 3663. All comments received will be available at the 
Commission docket room, and will be posted on the Commission website 
(www.prc.gov). Responsive comments also are welcome and should be 
provided within fifteen days.
    Ordering paragraphs. Ordering paragraph No. 1 invites interested 
persons to comment on the issues described in this notice related to 
the Commission's duties under 39 U.S.C. 3663 to submit annual reports 
to Congress on the costs, revenues, and volumes associated with 
international mail, and on the data and methods on which it should be 
based within 30 days of the publication of this notice in the Federal 
Register. Ordering paragraph No. 2 invites interested persons to submit 
reply comments within 15 days after initial comments are due. Ordering 
paragraph No. 3 directs the Secretary of the Commission to cause this 
notice of proposed rulemaking to appear in the Federal Register.

    Dated: November 19, 1999.
Margaret P. Crenshaw,
Secretary.

List of Subjects in 39 CFR Part 3001

    Administrative practice and procedure; Postal Service.

    For the reasons stated in the preamble, the Postal Rate Commission 
proposes to amend 39 CFR part 3001 as follows:

PART 3001--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 3001 is revised to read as 
follows:

    Authority: 39 U.S.C. 404(b); 3603, 3622-24, 3661, 3662, 3663.


[[Page 66441]]


    2. Add Sec. 3001.103 to subpart G to read as follows:


Sec. 3001.103  Filing of reports required by 39 U.S.C. 3663(b).

    Each report listed in this section shall be filed with the 
Secretary of the Commission on or before March 15th of each year, and 
shall cover the most recent full fiscal year. Information contained in 
these reports that is considered to be commercially sensitive should be 
identified as such, and will not be publicly disclosed except as 
required by applicable law. Specific sources cited in this section 
should be understood to include any successor or substituted source.
    (a) The International Cost and Revenue Analysis--PRC and USPS 
Versions.
    (b) The Cost and Revenue Analysis Report--PRC Version. If an 
unaudited version is provided on March 15, provide an audited version 
no later than May 15 that describes all adjustments that affect 
international mail.
    (c) The Cost Segments and Components Report--PRC Version. If an 
unaudited version is provided on March 15, provide an audited version 
no later than May 15 that describes all adjustments that affect 
international mail.
    (d) Documentation and workpapers for the ICRA, including those 
related to:
    (1) Terminal dues.
    (2) Air conveyance dues.
    (3) Transit charges.
    (4) Imbalance charges.
    (5) Inward land charges.
    (6) Description of cost allocation procedures.
    (7) Identification of costs that are exclusive to international 
mail.
    (8) The cost of joint ventures with other postal administrations.
    (9) International billing determinants.
    (10) The data for Direct Entry separated between inbound and 
outbound as in the Postal Service's response to Item 1 of order no. 
1246.
    (11) The attributable costs for ValuePost/Canada developed in 
accordance with the procedure described in the Postal Service's 
response to Item 2 of order no. 1251, or any alternative procedure 
deemed appropriate as a basis for setting the rates for ValuePost/
Canada. Costs for ValuePost/Canada should be separated between 
publications and all other printed matter. Its revenues and volumes 
should also be separated between publications and all other printed 
matter.
    (e) Handbooks pertaining to the collection of volume and revenue 
data (MIDAS, SIRVO, SIRVI, Other) if they were revised or replaced 
since they were last submitted.
    (f) International CRA manual input, A, B, C, and factor reports on 
a CD-ROM.
    (g) A hard copy of the International CRA manual input and the C 
report.
    (h) Cost Segment 3 CRA Worksheets and all supporting files, 
including the MODS-Based Costing Studies--PRC Version. Include all 
databases, SAS and other programs, and output worksheets.
    (i) Cost Segment 7 CRA worksheets and all supporting files.
    (j) The number of weighted tallies by international service 
separately for clerks and mailhandlers, and for city delivery carriers 
in-office; clerk and mailhandler tallies should be further separated 
for mail processing, window service, and all other.
    (k) Coefficients of variation for:
    (1) IOCS clerk and mailhandler tallies by mail processing, window 
service, and all other.
    (2) IOCS city delivery carriers in-office.
    (3) TRACS for purchased transportation by international, air, 
railroad, and other.
    (4) Outbound volume by international service.
    (5) Inbound volume by international service.
    (l) The percentage of household mail and the percentage of non-
household mail for each outbound mail service.
    (m) The percentage of single-piece mail and bulk mail for each 
outbound service.

[FR Doc. 99-30711 Filed 11-24-99; 8:45 am]
BILLING CODE 7715-01-P