[Federal Register Volume 66, Number 133 (Wednesday, July 11, 2001)]
[Proposed Rules]
[Pages 36224-36226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17239]


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POSTAL SERVICE

39 CFR Part 111


Delivery of Mail To a Commercial Mail Receiving Agency

AGENCY: Postal Service.

ACTION: Proposed rule with request for comments.

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SUMMARY: This proposed rule revises the Postal Service's regulations 
that govern procedures for delivery of an addressee's mail to a 
commercial mail receiving agency (CMRA). Under this proposed rule, 
procedures are provided to identify when a corporate executive center 
(CEC) or a part of its operation is considered a commercial mail 
receiving agency for purposes of these standards. This proposal revises 
a proposed rule published on February 2, 2000 (65 FR 4918). As a result 
of public comment to that rulemaking, discussed later, that proposal is 
rescinded and revised procedures are proposed to change the terminology 
from ``corporate executive center'' (CEC) to ``office business center'' 
(OBC). The Postal Service is also proposing revisions to the original 
proposed rule concerning the dollar test that was proposed, as well as 
proposing several other changes. The proposed rule will identify when 
an OBC or a part of its operations is considered a commercial mail 
receiving agency.

DATES: Comments must be received on or before August 10, 2001.

ADDRESSES: Written comments should be mailed to Manager, Delivery 
Operations, U.S. Postal Service, 475 L'Enfant Plaza SW., Room 7142, 
Washington, DC 20260-2802. Comments by email or fax will not be 
accepted. Copies of all written comments will be available for 
inspection and copying between 9 a.m. and 4 p.m., Monday through 
Friday, at the above address.

FOR FURTHER INFORMATION CONTACT: Roy E. Gamble, 202-268-3197.

SUPPLEMENTARY INFORMATION: On March 25, 1999, the Postal Service 
published a final rule in the Federal Register (64 FR 14385) amending 
sections D042.2.5 through D042.2.7 of the Domestic Mail Manual (DMM) to 
update and clarify procedures for delivery of an addressee's mail to a 
commercial mail receiving agency. The final rule provided procedures 
for registration to act as a CMRA; an addressee to request mail 
delivery to a CMRA; and delivery of the mail to a CMRA. This rule was 
applicable to all businesses that provide agent-mailing services to 
their customers; that is, the business receives delivery of mail for 
others from the Postal Service at a CMRA address.
    As explained in the February 2000 notice of proposed rulemaking 
(NPRM), a ``corporate executive center'' (CEC) is a business that 
operates primarily to provide private office facilities and business 
support services to individuals or firms (CEC customers). These CEC 
customers also may receive mail at the CEC address. CECs also may have 
customers that do not occupy a private office and use the CEC address

[[Page 36225]]

primarily to receive mail and other business support services. These 
CEC customers receive services similar to those a CMRA provides to its 
customers. For this reason, a number of parties have asserted that 
these customers and the CECs serving them should follow the same 
procedures as CMRAs and their customers. The Postal Service agrees with 
these suggestions.
    A CEC and industry representatives requested that the Postal 
Service provide guidelines to determine when a CEC is considered a CMRA 
for postal purposes; that is, when a CEC and its customers must follow 
the DMM rules governing the operation of CMRAs. Before publishing the 
February 2000 proposal, the Postal Service met with the parties to seek 
a consensus. There was general agreement that CEC customers who occupy 
a private office on a full-time basis at the CEC should not be 
considered CMRA customers for postal purposes. There was also general 
agreement that CEC customers who receive mail service (or mail and 
business support services) without the right to occupy private office 
space at the CEC should be considered CMRA customers for postal 
purposes. The difficult question arises when the CEC customer is 
entitled, in addition to mail and business support services, to private 
office space on a less-than-full-time basis. After discussions with the 
industry representatives, the Postal Service proposed an objective test 
based upon at least a $125 fee paid per month for occupancy and related 
support services by the CEC customer.
    Comments on the proposed rule were due on or before March 3, 2000. 
The Postal Service received a total of 118 comments. Of the total, 55 
comments were from CEC customers, 29 comments were from CEC owners or 
franchisers, 10 comments were from CMRA owners, and one comment was 
from a special interest group. These comments were largely identical in 
content, and all supported the rules with reservations or proposed 
changes. The other 23 comments were received from CEC owners or 
franchisers, CMRA owners, and CEC and CMRA customers. A joint comment 
was submitted by 33 states and the District of Columbia, represented by 
their respective Attorneys General, with the exception of one state 
represented by its Secretary of State. These comments all opposed the 
proposed rules.
    Several comments received that supported the February 2 NPRM rule 
expressed concern that because the CECs primarily operate a 
fundamentally different kind of business than do CMRAs, the CECs should 
be totally exempt from the CMRA standards. These comments were based on 
an assertion that the CECs provide all the attributes of residency to 
customers who use their services. Some commenters supported the rule 
but did not feel it appropriate to give a CMRA designation to any part 
of a CEC; these commenters argued that the proposed CEC rule should be 
rescinded immediately. Some commenters supported a test based on a fee 
paid by the CEC customer, but argued that the fee should be indexed by 
market area or provide a range with $125 as the upper limit. Some 
commenters stated that the fee should be lowered to $100 because 
``business address'' customers use CEC mail services and, on a flexible 
basis, their conference rooms. One CEC owner asserted the lower limit 
($125) for the services they offer is unrealistic because CEC customers 
have access to a ``corporate'' image.
    Commenters opposing the rule expressed concern that the 
distinguishing difference appears to be the minimum $125 fee. The 
extent of these comments expressed a wide range of concerns with the 
fee. One CMRA owner asserted the rule would exempt CEC ``business 
address'' customers from the CMRA rules and that both the CEC customer 
and the CMRA customer are buying the same image and, to set the cost of 
avoiding the CMRA rules at $125 is discrimination. One CEC owner 
promised to take the Postal Service to court because ``the USPS has no 
proper role in setting the terms of CEC service packages or the price 
they charge.'' Another CEC owner asserted that the rule as written 
would essentially govern how the industry describes and prices its 
services, thereby condoning and encouraging price fixing. One commenter 
expressed concern that the proposed definition will open a major 
loophole in the regulations for those who wish to avoid address and 
informational requirements associated with receiving CMRA services. One 
CMRA owner stated, ``The CEC is also an industry that provides an 
avenue for receipt of mail without the individual being physically 
located and conducting business at the address. Apparently the post 
office believes that anyone willing and able to pay $125 per month to 
receive mail at an address wouldn't be the kind of person who would 
perpetrate fraud. The USPS does not intend to reduce mail fraud but to 
regulate their closest competition out of business.'' Another commenter 
stated, ``The standards should require that a CEC customer actually 
conduct business at the address.''
    The Postal Service does not believe it unreasonable to require CEC 
customers who receive mail and business support services similar to 
those provided by CMRAs to be considered CMRA customers for postal 
purposes. Indeed, were that not the case, CMRAs could argue that they 
were treated unfairly. The Postal Service only seeks to ensure that 
parties receiving similar services are treated in the same manner by 
the Postal Service. CEC customers that do not receive CMRA-type 
services are not considered CMRA customers for postal purposes under 
the proposal, and CECs that do not provide CMRA-type services to any 
customers will not be subject to the DMM rules governing CMRAs.
    Some of the objections to the proposed $125 fee standard appear to 
have been based on a misunderstanding of the proposal. The fee standard 
did not apply to situations where customers received only mail or 
related business support services other than private office occupancy. 
These parties were to be considered CMRA customers for postal purposes 
regardless of the fee paid to the CEC. Although the Postal Service 
understands that some CECs may have told customers that price increases 
were required by the Postal Service, there was no basis for that 
assertion or that the proposal would have constituted ``price fixing.'' 
The proposal did not require CECs to charge customers any specific 
amount. Instead, it merely sought to base the determination on whether 
customers should be treated as CMRA customers for postal purposes on an 
objective combination of the services provided and the fees charged.
    Based in part on the concerns expressed by commenters, the Postal 
Service has withdrawn the test proposed in the February 2000 
rulemaking. The Postal Service met again with industry representatives 
to seek agreement on a different set of guidelines. This time, the 
discussion centered on the number of hours of occupancy of the private 
office to which the CEC customer was entitled in its agreement with the 
CEC. There was a wide range of opinions, even among CEC 
representatives, as to the appropriate test. For instance, one CEC 
representative suggested that a right to full-time occupancy be 
required, while another suggested that one hour per week on average 
would be appropriate. No consensus was reached.
    After reviewing the points raised by the parties, the proposed 
guidelines in this NPRM are based on 16 hours of private office 
occupancy per month. That is, if the agreement between the CEC and its 
customer provides the right

[[Page 36226]]

to at least 16 hours of private office space per month (in addition to 
certain support services and other requirements), then that customer 
will not be considered a CMRA customer for postal purposes. We 
understand that the fees charged by CECs for services that include the 
right to at least 16 hours per month of private office occupancy will 
generally significantly exceed the fees charged by CMRAs and will 
ensure a meaningful distinction between CMRA and CEC customers. 
However, we were also mindful that the standard not be set too high. We 
believe that some customers use CECs because they are primarily 
interested in private office space, rather than CMRA-type services, but 
only need such space on a limited basis due to the nature of their 
businesses. We also note that this proposed test is based on private 
office space being set aside for 16 hours for a specific individual or 
firm, regardless of the actual hours that the individual or firm 
occupies the space. A test based on actual occupancy would be difficult 
to administer and would create a burden on CECs to maintain occupancy 
records. We have also proposed several other changes to the procedures 
of the original proposal and made other changes that are not 
substantive in nature.
    During recent discussions, CEC representatives also proposed a 
change in terminology. They explained that the preferred terminology 
for their businesses is ``office business center'' or OBC. The Postal 
Service is incorporating the request in this NPRM.
    Although exempt from the notice and comment requirements of the 
Administrative Procedures Act (5 U.S.C. of 553(b), (c)) regarding 
proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites 
public comment on the following proposed revisions to the Domestic Mail 
Manual, incorporated by reference in the Code of Federal Regulations. 
See 39 CFR Part 111.1.

List of Subjects in 39 CFR Part 111

    Postal Service.

PART 111--[AMENDED]

    1. The authority citation for 39 CFR Part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 3001 
3011, 3201-3219, 3403-3406, 3621, 5001.

    2. Section D042.2.0 of the Domestic Mail Manual is amended by 
adding subsection D042.2.8 to read as follows:

D  Deposit, Collection, and Delivery

D000  Basic Information

* * * * *

D040  Delivery of Mail

* * * * *

D042  Conditions of Delivery

* * * * *
2.0  DELIVERY TO ADDRESSEE'S AGENT
* * * * *
[Add new 2.8 to read as follows:]

2.8 OBC Acting as a CMRA

    The procedures for an office business center (OBC) or part of its 
operation acting as a commercial mail receiving agency (CMRA) for 
postal purposes are as follows:
    a. An OBC is a business that operates primarily to provide private 
office facilities and business support services to individuals or firms 
(customers). OBCs receive single point delivery. OBC customers that 
receive mail at the OBC address will be considered CMRA customers for 
postal purposes under the standards set forth in b. Parties considered 
CMRA customers under this provision must comply with the standards set 
forth in 2.5 through 2.7. An OBC must register as a CMRA and comply 
with all other CMRA standards if one or more customers receiving mail 
through its address is considered a CMRA customer.
    b. An OBC customer is considered to be a CMRA customer for postal 
purposes if its written agreement with the OBC provides for mail 
service only or mail and other business services (without regard for 
occupancy or other services that the OBC might provide and bill 
separately). Additionally, an OBC customer receiving mail at the OBC 
address is considered to be a CMRA customer for postal purposes if each 
of the following is true:
    (1) The customer's written agreement with the OBC does not provide 
for the full-time use of one or more of the private offices within the 
OBC facility; and
    (2) The customer's written agreement with the OBC does not provide 
all of the following:
    (A) The use of one or more of the private offices within the OBC 
facility for at least 16 hours per month;
    (B) Full-time receptionists service and live personal telephone 
answering service during normal business hours and voice mail service 
after hours;
    (C) A listing in the office directory, if available, in the 
building in which the OBC is located; and
    (D) Use of conference rooms and other business services on demand, 
such as secretarial services, word processing, administrative services, 
meeting planning, travel arrangements, and videoconferencing.
    c. Notwithstanding any other standards, a customer whose written 
agreement provides for mail services only or mail and other business 
support services will not be considered an OBC customer (without regard 
for occupancy or other services that an OBC may provide and bill for on 
demand).
    d. The Postal Service may request from the OBC copies of written 
agreements or any other documents or information needed to determine 
compliance with these standards. Failure to provide requested documents 
or information may be a basis for suspending delivery service to the 
OBC under the procedures set forth in 2.6f through h.
* * * * *
    An appropriate amendment to 39 CFR 111.3 to reflect this change 
will be published if the proposal is adopted.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 01-17239 Filed 7-10-01; 8:45 am]
BILLING CODE 7710-12-P