[Federal Register Volume 66, Number 209 (Monday, October 29, 2001)]
[Rules and Regulations]
[Pages 54436-54444]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27090]


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POSTAL RATE COMMISSION

39 CFR Part 3001

[Order No. 1322; Docket No. RM2001-3]


Adoption of Sunset Rules

AGENCY: Postal Rate Commission.

ACTION: Notice and order adopting final rules with sunset provisions.

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SUMMARY: Several sets of Commission rules of practice have expired. 
They addressed Express Mail rates and fees and certain limited 
classification changes. The Commission is adopting these rules again, 
on the same terms. The rules will be effective for 5 years. This action 
will allow established practices to continue, subject to sunset 
provisions.

DATES: These rules take effect November 28, 2001.

ADDRESSES: Send correspondence regarding this document to the attention 
of Steven W. Williams, acting secretary, 1333 H Street NW., suite 300, 
Washington, DC 20268-0001.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, general counsel, 
202-789-6820.

SUPPLEMENTARY INFORMATION:

Regulatory History

    Previous related rulemakings: Express Mail market response rules: 
60 FR 12119; expedited minor classification cases, market test rules 
for classification changes; limited provisional service changes; and 
multi-year test period rules: 61 FR 24453--61 FR 24457.
    Current rulemaking: 66 FR 39560 
(7/13/01) and 66 FR 38602 (7/25/01).

Introduction

    In order no. 1319, the Commission requested interested persons to 
comment on the advisability of reissuing five sets of rules of practice 
that had expired through operation of five-year sunset provisions. PRC 
Order No. 1319 (July 18, 2001). These rules, which provide for 
expedited consideration of certain Postal Service requests for a 
recommended decision, are of two types. The first concerns changes in 
Express Mail rates and fees; \1\ the second encompasses four sets of 
rules addressing certain limited classification changes.\2\
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    \1\ See 39 CFR 3001.57-57c (1999). The Express Mail Service 
rules were adopted in 1989 and reissued in 1995. See PRC Order No. 
836 (August 10, 1989) and PRC Order No. 1042 (February 17, 1995). 
These rules expired March 6, 2000. 60 FR 12116.
    \2\ See 39 CFR 3001.161-166 (concerning market tests), 39 CFR 
3001.171-176 (concerning provisional service changes), 39 CFR 
3001.69-69c, (concerning minor classification changes), and 39 CFR 
3001.181-182 (concerning multi-year test periods for new services). 
These rules became effective in May 1996 and expired May 15, 2001. 
See PRC Order No. 1110 (May 7, 1996); see also 61 FR 24447.
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    Four sets of comments were filed. The comments reflect no 
unanimity, ranging from the Postal Service's suggestion that, at a 
minimum, each rule be reissued, to United Parcel Service's (UPS's) 
position that none of the rules be reissued. The comments, which are 
briefly summarized below, are available for public inspection at the 
Commission's offices and via the Commission's Web site, www.prc.gov.
    Upon consideration of the comments and an assessment of the rules, 
the Commission has determined to reissue the rules for an additional 
five-year period. The Commission, however, declines to broaden the 
scope of this proceeding beyond the affected rules.

I. Comments

A. Postal Service

    The Postal Service urges the Commission to reissue and to consider 
broadening the scope of the rules. The Postal Service asserts that, at 
a minimum, the limited classification rules should be reissued, 
suggesting further that the Commission should consider expanding the 
concept of multi-year test periods, rule 181, to include alternative 
test periods in rate and classification proceedings before the 
Commission. Postal Service Comments at 1-2, 12.
    Second, the Postal Service advocates that the Express Mail rules be 
reissued, while suggesting the possibility that those procedures be 
expanded to other services. Id. at 2-3. Recognizing that this 
suggestion may be beyond the reach of this proceeding, the Postal 
Service concludes that the concept ``is worthy of consideration at some 
point in the future.'' Id. at 3.
    Third, the Postal Service raises issues not covered by the expired 
rules, i.e., rate bands and negotiated service agreements, concluding 
that ``these and other measures of ratemaking flexibility would be 
worthwhile topics of a future rulemaking.'' Ibid.
    In support of reissuing the rules, the Postal Service focuses on 
the flexibility they afford, particularly the limited classification 
rules. The infrequency with which these rules have been invoked is not, 
according to the Postal Service, an indication that they lack value. 
Rather, a combination of events has lessened the Postal Service's 
ability to invoke the rules, e.g., its caseload before the Commission. 
Id. at 4-5. Underscoring the point, it notes that the Commission's 
rules governing experimental classification proposals, 39 U.S.C. 
3001.67-67d, were employed only once in the first fifteen years of 
their existence. Id. at 4. Beginning in 1996, however, they have been 
invoked numerous times.
    Turning to the rules, the Postal Service discusses the instances in 
which the limited classification rules have been invoked. It concludes 
that these rules, involving market tests, provisional services, and 
minor classification changes, while from its perspective somewhat 
imperfect, worked sufficiently well to warrant their renewal. Id. at 7-
11. Concerning multi-year test periods, a rule that it has yet to 
invoke, the Postal Service notes the importance of having an 
opportunity to recover start-up costs over an appropriate period. In 
addition, it broaches the issue of expanding the Commission's rules to 
permit alternate

[[Page 54437]]

test periods ``in all Commission proceedings conducted pursuant to 39 
U.S.C. 3622 and 3623.'' Id. at 12. Noting that this issue has been 
previously considered, the Postal Service states that such an expansion 
would promote rate proposals based on phased rate schedules ``over a 
predetermined rate cycle.'' Id. at 13.
    Finally, citing their potential utility, the Postal Service urges 
the Commission to renew the Express Mail rules. It would prefer, 
however, if the rules were expanded ``to other services facing market 
pressures similar to Express Mail.'' Id. at 15. As noted above, the 
Postal Service recognizes that this suggestion may exceed the scope of 
this rulemaking. Id. at 2-3.

B. Newspaper Association of America (NNA)

    The NNA submitted brief comments advocating that each of the 
expired rules be reissued.

C. Office of Consumer Advocate (OCA)

    The OCA frames the issue whether to reissue the rules by posing 
several questions, e.g., whether the rules were invoked, whether they 
are likely to be used, and whether the rules need to be revised. OCA 
Comments at 2. Having considered these questions, the OCA recommends 
against reissuing the Express Mail rules, but favors renewing those 
involving limited classification changes.
    Citing the history of the rules, i.e., their never being invoked 
and the Postal Service's failure to seek their renewal, the OCA claims 
that the Express Mail rules are unnecessary. In addition, the OCA 
asserts that the Commission can, on an ad hoc basis, accommodate 
requests for expedition should it be warranted. Id. at 3.
    In general, the OCA finds renewal of the limited classification 
rules is justified because the rules have proved useful, workable, and 
practical. Id. at 3-6. The OCA supports reissuing rule 181, multi-year 
test periods, because among other things, the rule signals the 
Commission's willingness to consider new services requiring a longer 
test period. Id. at 7.\3\
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    \3\ The OCA also notes the need to conform the instant rules to 
rules currently under consideration in docket no. RM2001-2, Filing 
Online. This is a matter to be addressed in a subsequent order since 
that docket remains pending.
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D. UPS

    UPS opposes reissuing the rules, contending that they are neither 
necessary nor useful. UPS Comments at 1-2. UPS advances three arguments 
against reissuing the Express Mail rules. First, it notes that they 
have never been employed by the Postal Service. Id. at 2. Second, it 
asserts that the market for expedited letters is mature, implying that 
there is no need for the Express Mail rules. Ibid. Third, UPS argues 
that the Commission's regular rules are adequate to address requests 
for expedition. Id. at 3; see also 6-9.
    Citing their infrequent use, UPS also opposes reissuing the rules 
concerning limited classification changes. Id. at 3-4. Further, UPS 
asserts that the rules for minor classification cases, provisional 
changes, and market tests are ambiguous and thus ``invite litigation 
over whether the proper set of rules is being applied.'' Id. at 5.
    UPS argues that the Commission's regular rules are sufficiently 
flexible to address the Postal Service's rate and classification 
requests. In support, it cites, inter alia, rule 1 (the rules are to be 
liberally construed to achieve a just and speedy result), rule 23(a)(1) 
(concerning the presiding officer's hearing authority), and rule 22 
(concerning waivers). Id. at 6-7. In addition, UPS suggests that the 
rules governing experimental changes provide sufficient flexibility 
``to accommodate situations that the regular rules do not cover.'' Id. 
at 8.
    Finally, UPS contends that reissuing the rules poses certain risks. 
These include: predetermined procedural tracks that may not be 
appropriate, more rules add complexity and confusion and, assuming the 
rules are unnecessary, raising the ``potential for implicating due 
process concerns.'' Id. at 10.

II. Discussion

    The Commission's decision to reissue the rules is influenced by 
several factors. First, the rules were previously enacted. Thus not 
only are they well known to participants, there has been ample 
opportunity to consider and to comment on the rules. Second, the rules 
are narrowly drawn and have not engendered significant controversy. 
Third, they afford the Postal Service procedural flexibility while, 
concomitantly, protecting intervenors' rights to participate 
meaningfully in any such proceeding. Fourth, the rules have proven to 
be workable, or provide an option that, on balance, continues to have 
merit. Finally, renewing the rules, including the sunset provisions, 
will enable the Postal Service and parties to gain further experience 
while also tolling their existence should they become unnecessary or 
obsolete.
    The limited classification rules have proven to be workable and 
useful. See OCA Comments at 3 et seq., Postal Service Comments at 7 et 
seq. For example, the market test rules, 39 CFR 3001.161-166, were 
successfully invoked in docket no. MC98-1, Mailing Online. The rules 
permitting minor classification changes, 39 CFR 3001.69-69c, were 
successfully employed in docket no. MC99-4, Bulk Parcel Return Service. 
The settlement which resulted in that proceeding was facilitated, at 
least in part, by the operation of the rules. The Postal Service 
invoked the rules concerning provisional services, 39 CFR 3001.171-176, 
in docket no. MC97-5. While the packaging service proposal in that 
proceeding was never implemented, the rules operated effectively, 
allowing the Postal Service to introduce a new product. Similarly, the 
multi-year test period rules, 39 CFR 3001.181-182, while not yet 
invoked, provide a useful tool for assessing new services. Taken as a 
whole, the rules provide a simplified means for the Postal Service to 
present and the Commission to consider innovations and refinements in 
its service offerings.
    UPS's claim that the rules are ambiguous is not sufficient reason 
not to reissue them. First, the claim has not been borne out in 
practice. The rules have worked reasonably well. Second, UPS's 
suggestion that the regular rules are an adequate ad hoc surrogate for 
the instant rules is not persuasive. The argument implicitly assumes 
that were the Postal Service to request a waiver of the regular rules 
it would engender no controversy in its own right. In practice, such a 
result would appear to be unlikely. On occasion, controversy may be an 
unavoidable byproduct of any rules, but this does not establish a 
legitimate basis to discard the instant rules.\4\
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    \4\ UPS's due process concerns are neither well founded nor well 
developed. They proceed from the flawed assumption that the rules 
are unneeded, and even with that assumption, give rise only to ``the 
potential for implicating due process concerns.'' UPS Comments at 
10. The Commission has previously addressed potential due process 
problems associated with the instant rules. Among other things the 
Commission assured ``all parties that it will not allow [the limited 
classification] rules to be used to alter the normally applicable 
standards of proof, curtail legitimate discovery and hearing 
practice, or otherwise deprive interested parties of their 
procedural rights.'' PRC order no. 1110 (May 7, 1995) at 7.
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    The Express Mail market rules, 39 CFR 3001.57-57c (1999), present a 
closer question.\5\ Two commenters favor and two commenters oppose 
their renewal. Those opposing note that the rule has never been 
invoked. UPS Comments at 2; OCA Comments at 2.

[[Page 54438]]

They assert this demonstrates that the rule is unnecessary. Lack of 
use, however, is not necessarily dispositive. As the Postal Service 
notes, the rules governing experimental classification changes were 
used but once in their first 15 years of existence, but have been 
employed seven times in the last six years.\6\ Furthermore, the Postal 
Service cites various factors that weighed on its use of these rules. 
Postal Service Comments at 14. In addition, the Postal Service touts 
the potential value of the rules.
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    \5\ The Express Mail rules in the attachment reflect 
renumbering. Former rule 57a is now rule 58; former rule 57b is now 
rule 59; and former rule 57c is now rule 60.
    \6\ Docket no. MC2001-1 (regarding presorted priority mail), 
docket No. MC2000-2 (regarding Mailing Online), docket no. MC2000-1 
(regarding ride-along changes for publications), docket no. MC99-1 
(regarding non-letter-size business reply mail), docket no. MC98-1 
(regarding Mailing Online), docket no. MC97-1 (regarding non-letter 
size business reply mail), and docket no. MC96-1 (regarding small 
parcel automation rate).
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    The Commission concludes that reissuing the Express Mail Service 
rules is appropriate. Lack of use is not, in this instance, compelling 
enough to foreclose the flexibility afforded by this option. The rules 
provide adequate safeguards to protect the interests of all interested 
persons. Furthermore, inclusion of the sunset provision will ensure 
that these rules will be reviewed again within five years or expire on 
their own accord.
    The Commission declines to act on the Postal Service's suggestion 
that its rules be expanded. See, e.g., Postal Service Comments at 2-3. 
This proceeding was commenced solely to consider the status of the 
expired rules. Expanding it to include new issues would raise concerns 
about timing and notice. This is not to suggest that the topics do not 
merit further attention, but simply that this is not the appropriate 
vehicle.
    In conclusion, pursuant to the foregoing discussion, the Commission 
hereby amends its rules of practice as set forth in the attachment to 
this order.

III. Ordering Paragraphs

    It is ordered:
    1. The Commission's rules of practice are amended as set forth in 
the attachment.
    2. The attached rules are effective November 28, 2001.
    3. The acting secretary shall cause this order to be published in 
the Federal Register.

    Dated: September 24, 2001.
Steven W. Williams,
Acting 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 
amends 39 CFR part 3001 as follows:

PART 3001--[AMENDED]

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

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

    2. Amend subpart B, Rules Applicable to Requests for Changes in 
Rates or Fees, by adding Secs. 3001.57-3001.60 to read as follows:


Sec. 3001.57  Market response rate requests for express mail service--
purpose and duration of rules.

    (a) This section and Secs. 3001.58 through 3001.60 only apply in 
cases in which the Postal Service requests an expedited recommended 
decision pursuant to section 3622 of the Postal Reorganization Act on 
changes in rates and fees for Express Mail service, where the proposed 
changes are intended to respond to a change in the market for expedited 
delivery services for the purpose of minimizing the loss of Express 
Mail contribution to institutional costs recommended in the most recent 
omnibus rate case. These rules set forth the requirements for filing 
data in support of such rate proposals and for providing notice of such 
requests, and establish an expedited procedural schedule for evaluating 
Market Response Rate Requests. These rules may not be used when the 
Postal Service is requesting changes in Express Mail rates as part of 
an omnibus rate case.
    (b) This section and Secs. 3001.58 through 3001.60 are effective 
November 28, 2001 through November 28, 2006.


Sec. 3001.58  Market response rate requests--data filing requirements.

    (a) Each formal request made under the provisions of Secs. 3001.57 
through 3001.60 shall be accompanied by such information and data as 
are necessary to inform the Commission and the parties of the nature 
and expected impact of the change in rates proposed. Except for good 
cause shown, the information specified in paragraphs (c) through (i) 
shall also be provided with each request.
    (b) Except as otherwise expressly provided in this section, the 
information required by Sec. 3001.54 (b) through (r) must be filed only 
for those subclasses and services for which the Postal Service requests 
a change in rates or fees. Test period volume, cost, and revenue 
estimates presented in satisfaction of rule 58 shall be for four postal 
quarters beginning after the filing date of the request. The cost roll-
forward may be developed by extending the cost forecasting model used 
in the last omnibus rate case (utilizing available actual data). Volume 
and revenue estimates required by these rules shall utilize, to the 
extend practicable, the factors identified in rule 54(j)(6), and must 
be fully explained, with all available supporting documentation 
supplied, but they need not be econometrically derived.
    (c) Every formal request made under the provisions of Secs. 3001.57 
through 3001.60 shall contain an explanation of why the change proposed 
by the Postal Service is a reasonable response to the change in the 
market for expedited delivery services to which it is intended to 
respond.
    (d) Every formal request made under the provisions of Secs. 3001.57 
through 3001.60 shall be accompanied by the then effective Domestic 
Mail Classification Schedule sections which would have to be altered in 
order to implement the changes proposed by the Postal Service, and, 
arranged in a legislative format, the text of the replacement Domestic 
Mail Classification Schedule sections the Postal Service proposes.
    (e) In addition to the required test period cost estimates, every 
formal request made under the provisions of Secs. 3001.57 through 
3001.60 shall be accompanied by a statement of the attributable costs 
by segment and component for Express Mail service determined in 
accordance with the attributable cost methodology adopted by the 
Commission in the most recent omnibus rate case, for the base year used 
in that case, and for each fiscal year thereafter for which cost data 
is available. If the Postal Service believes that an adjustment to that 
methodology is warranted it may also provide costs using alternative 
methodologies as long as a full rationale for the proposed changes is 
provided.
    (f) Each formal request made under the provisions of Secs. 3001.57 
through 3001.60 shall include a description of all operational changes, 
occurring since the most recent omnibus rate case, having an important 
impact on the attributable cost of Express Mail. Postal Service shall 
include an analysis and estimate of the cost impact of each such 
operational change.
    (g) Every formal request made under the provisions of Secs. 3001.57 
through 3001.60 shall be accompanied by a statement of the actual 
Express Mail revenues of the Postal Service from the then effective 
Express Mail rates and fees for the most recent four quarters for which 
information is available.

[[Page 54439]]

    (h) Each formal request made under the provisions of Secs. 3001.57 
through 3001.60 shall be accompanied by a complete description of the 
change in the market for expedited delivery services to which the 
Postal Service proposal is in response, a statement of when that change 
took place, the Postal Service's analysis of the anticipated impact of 
that change on the market, and a description of characteristics and 
needs of customers and market segments affected by this change which 
the proposed Express Mail rates are designed to satisfy.
    (i) Each formal request made under the provisions of Secs. 3001.57 
through 3001.60 shall include estimates, on a quarterly basis, of test 
period volumes, revenues, and attributable costs determined in 
accordance with the attributable cost methodology adopted by the 
Commission in the most recent omnibus rate case for each Express Mail 
service for which rate changes are proposed assuming:
    (1) rates remain at their existing levels, and
    (2) rates are changed after 90 days to the levels suggested in the 
request.
    (j)(1) Each formal request made under the provisions of 
Secs. 3001.57 through 3001.60 shall be accompanied by the following 
information, for each quarter following the base year in the most 
recent omnibus rate case:
    (i) Estimated volume by rate cell, for each Express Mail service;
    (ii) Total postage pounds of Express Mail rated at:
    (A) up to \1/2\ pound,
    (B) \1/2\ pound up to 2 pounds,
    (C) 2 pounds up to 5 pounds; and
    (iii) Total pounds of Express Mail and of each other subclass of 
mail carried on hub contracts.
    (2) In each instance when rates change based on a proceeding under 
the provisions of Secs. 3001.57 through 3001.60 the Postal Service 
shall provide, one year after the conclusion of the test period, the 
data described in section 3001.58(j)(1)(i-iii), for each of the four 
quarters of the test period.
    (k) Each formal request made under the provisions of Secs. 3001.57 
through 3001.60 shall include analyses to demonstrate:
    (1) that the proposed rates are consistent with the factors listed 
in 39 U.S.C. 3622(b),
    (2) that the proposed rate changes are in the public interest and 
in accordance with the policies and applicable criteria of the Act, and
    (3) that the proposed rates will preserve, or minimize erosion of, 
the Express Mail contribution to institutional costs recommended in the 
most recent omnibus rate case.
    (l) Each formal request made under the provisions of Secs. 3001.57 
through Sec. 3001.60 shall be accompanied by a certificate that service 
of the filing in accordance with Sec. 300l.59(c) has been made.


Sec. 3001.59  Market Response Rate Requests-expedition of public notice 
and procedural schedule.

    (a) The purpose of this section is to provide a schedule for 
expediting proceedings when a trial-type hearing is required in a 
proceeding in which the Postal Service proposes to adjust rates for 
Express Mail service in order to respond to a change in the market for 
expedited delivery services.
    (b) The Postal Service shall not propose for consideration under 
the provisions of Secs. 3001.57 through 3001.60 rates lower than:
    (1) The average per piece attributable cost for Express Mail 
service determined in the most recent omnibus rate case, or
    (2) The average per piece attributable cost for Express Mail 
service as determined by the Postal Service in accordance with section 
3001.58(e) for the most recent fiscal year for which information is 
available, whichever is higher. Neither shall the Postal Service 
propose a rate for any rate cell which is lower than the estimated test 
period attributable cost of providing that rate cell with service.
    (c)(1) Persons who are interested in participating in Express Mail 
Market Response Rate Request cases may register at any time with the 
Secretary of the Postal Rate Commission, who shall maintain a publicly 
available list of the names and business addresses of all such Express 
Mail Market Response registrants. Persons whose names appear on this 
list will automatically become parties to each Express Mail Market 
Response rate proceeding. Other interested persons may intervene 
pursuant to section 3001.20 within 28 days of the filing of a formal 
request made under the provisions of Secs. 3001.57 through 3001.60. 
Parties may withdraw from the register or a case by filing a notice 
with the Commission.
    (2) When the Postal Service files a request under the provisions of 
Secs. 3001.57 through 3001.60 it shall on that same day effect service 
by hand delivery of the complete filing to each Express Mail Market 
Response registrant who maintains an address for service within the 
Washington metropolitan area and serve the complete filing by Express 
Mail service on all other registrants. Each registrant is responsible 
for insuring that his or her address remains current.
    (3) When the Postal Service files a request under the provisions of 
Secs. 3001.57 through 3001.60, it shall on that same day send by 
Express Mail service to all participants in the most recent omnibus 
rate case a notice which briefly describes its proposal. Such notice 
shall indicate on its first page that it is a notice of an Express Mail 
Market Response Rate Request to be considered under Secs. 3001.57 
through 3001.60, and identify the last day for filing a notice of 
intervention with the Commission.
    (d) In the absence of a compelling showing of good cause, the 
Postal Service and parties shall calculate Express Mail costs in 
accordance with the methodologies used by the Commission in the most 
recent omnibus rate case. In the analysis of customers' reactions to 
the change in the market for expedited delivery services which prompts 
the request, the Postal Service and parties may estimate the demand for 
segments of the expedited delivery market and for types of customers 
which were not separately considered when estimating volumes in the 
most recent omnibus rate case.
    (e)(1) In the event that a party wishes to dispute as an issue of 
fact whether the Postal Service properly has calculated Express Mail 
costs or volumes (either before or after its proposed changes), or 
wishes to dispute whether the change in the market for expedited 
delivery services cited by the Postal Service has actually occurred, or 
wishes to dispute whether the rates proposed by the Postal Service are 
a reasonable response to the change in the market for expedited 
delivery services or are consistent with the policies of the Postal 
Reorganization Act, that party shall file with the Commission a request 
for a hearing within 28 days of the date that the Postal Service files 
its request. The request for hearing shall state with specificity the 
fact or facts set forth in the Postal Service's filing that the party 
disputes, and when possible, what the party believes to be the true 
fact or facts and the evidence it intends to provide in support of its 
position.
    (2) The Commission will not hold hearings on a request made 
pursuant to Secs. 3001.57 through 3001.60 unless it determines that 
there is a genuine issue of material fact to be resolved, and that a 
hearing is needed to resolve this issue.
    (3) Whether or not a hearing is held, the Commission may request 
briefs and/or argument on an expedited schedule, but in any 
circumstance it will issue its recommended decision as promptly as

[[Page 54440]]

is consistent with its statutory responsibilities.
    (4) In order to assist in the rapid development of an adequate 
evidentiary record, all participants may file appropriate discovery 
requests on other participants as soon as an Express Mail Market 
Response Rate Request is filed. Answers to such discovery requests will 
be due within 10 days. Objections to such discovery requests must be 
made within 10 days in the form of a motion to excuse from answering, 
with service on the questioning participant made by hand, facsimile, or 
expedited delivery. Responses to motions to excuse from answering must 
be submitted within seven days, and should such a motion be denied, the 
answers to the discovery in question are due within seven days of the 
denial thereof. It is the Commission's intention that parties resolve 
discovery disputes informally between themselves whenever possible. The 
Commission, therefore, encourages the party receiving discovery 
requests considered to be unclear or objectionable to contact counsel 
for the party filing the discovery requests whenever further 
explanation is needed, or a potential discovery dispute might be 
resolved by means of such communication.
    (5) If, either on its own motion, or after having received a 
request for a hearing, the Commission concludes that there exist one or 
more genuine issues of material fact and that a hearing is needed, the 
Commission shall expedite the conduct of such record evidentiary 
hearings to meet both the need to respond promptly to changed 
circumstances in the market and the standards of 5 U.S.C. 556 and 557. 
The procedural schedule, subject to change as described in paragraph 
(e)(6) of this section, is as follows: Hearings on the Postal Service 
case will begin 35 days after the filing of an Express Mail Market 
Response rate request; parties may file evidence either in support of 
or in opposition to the Postal Service proposal 49 days after the 
filing; hearings on the parties' evidence will begin 56 days after the 
filing; briefs will be due 70 days after the filing; and reply briefs 
will be due 77 days after the filing.
    (6) The presiding officer may adjust any of the schedule dates 
prescribed in (e)(5) of this section in the interests of fairness, or 
to assist in the development of an adequate evidentiary record. 
Requests for the opportunity to present evidence to rebut a submission 
by a participant other than the Postal Service should be filed within 
three working days of the receipt of that material into the evidentiary 
record, and should include a description of the evidence to be offered 
and the amount of time needed to prepare and present it. Requests for 
additional time will be reviewed with consideration as to whether the 
requesting participant has exercised due diligence, and whether the 
requesting participant has been unreasonably delayed from fully 
understanding the proposal.


Sec. 3001.60  Express mail market response--rule for decision.

    The Commission will issue a recommended decision in accordance with 
the policies of 39 U.S.C., and which it determines would be a 
reasonable response to the change in the market for expedited delivery 
services. The purpose of Secs. 3001.57 through 3001.60 is to allow for 
consideration of Express Mail Market Response rate requests within 90 
days, consistent with the procedural due process rights of interested 
persons.
    3. Amend Subpart C, Rules Applicable to Requests for Establishing 
or Changing the Mail Classification Schedule, by adding Secs. 3001.69-
69c to read as follows:


Sec. 3001.69  Expedited minor classification cases--applicability.

    (a) This section and Secs. 3001.69a through 3001.69c apply in cases 
where the Postal Service requests a recommended decision pursuant to 
section 3623 and seeks expedited review on the ground that the 
requested change in mail classification is minor in character. The 
requirements and procedures specified in these sections apply 
exclusively to the Commission's consideration of requested mail 
classification changes which the Postal Service denominates as, and the 
Commission finds to be, minor in character. A requested classification 
change may be considered to be minor in character if it:
    (1) Would not involve a change in any existing rate or fee;
    (2) Would not impose any restriction in addition to pre-existing 
conditions of eligibility for the entry of mail in an existing subclass 
or category of service, or for an existing rate element or work sharing 
discount; and
    (3) Would not significantly increase or decrease the estimated 
institutional cost contribution of the affected subclass or category of 
service.
    (b) This section and Secs. 3001.69a through 3001.69c are effective 
November 28, 2001 through November 28, 2006.


Sec. 3001.69a  Expedited minor classification cases--filing of formal 
request and prepared direct evidence.

    (a) Whenever the Postal Service determines to request that the 
Commission submit a decision recommending a mail classification change, 
and to seek expedited review on the ground that the requested change is 
minor in character, it shall file a request for a change in mail 
classification pursuant to section 3623 that comports with the 
requirements of this section and of subpart C of this part. Each such 
formal request shall include the following particular information:
    (1) A description of the proposed classification change or changes, 
including proposed changes in the text of the Domestic Mail 
Classification Schedule and any pertinent rate schedules;
    (2) A thorough explanation of the grounds on which the Postal 
Service submits that the requested change in mail classification is 
minor in character; and
    (3) An estimate, prepared in the greatest level of detail 
practicable, of the overall impact of the requested change in mail 
classification on postal costs and revenues, mail users, and 
competitors of the Postal Service.
    (b) If the Postal Service believes that data required to be filed 
under Sec. 3001.64 are unavailable, it shall explain their 
unavailability, as required by Sec. 3001.64(a)(2)(i), (ii), and (iv). 
If the Postal Service believes that any of the data or other 
information required to be filed under Sec. 3001.64 should not be 
required in light of the minor character of the requested change in 
mail classification, it shall move for a waiver of that requirement, 
stating with particularity the reasons why the character of the request 
and its circumstances justify a waiver of the requirement. A 
satisfactory explanation of the unavailability of information required 
under Sec. 3001.64, or of why it should not be required to support a 
particular request, will be grounds for excluding from the proceeding a 
contention that the absence of the information should form a basis for 
rejection of the request, unless the party desiring to make such 
contention
    (1) Demonstrates that, having regard to all the facts and 
circumstances of the case, it was clearly unreasonable for the Postal 
Service to propose the change in question without having first secured 
the information and submitted it in accordance with Sec. 3001.64; or
    (2) Demonstrates other compelling and exceptional circumstances 
requiring that the absence of the information in

[[Page 54441]]

question be treated as bearing on the merits of the proposal.


Sec. 3001.69b  Expedited minor classification cases--expedition of 
procedural schedule.

    (a) The purpose of this section is to provide a schedule for 
expediting proceedings in which the Postal Service requests that the 
Commission recommend a change in mail classification and expedite 
consideration of that request on the ground that the change is minor in 
character.
    (b) Persons who are interested in participating in proceedings to 
consider Postal Service requests for minor changes in mail 
classification may register at any time with the Secretary of the 
Postal Rate Commission, who shall maintain a publicly available list of 
the names and business addresses of all such registrants. Persons whose 
names appear on this list will automatically become parties to each 
proceeding in which the Postal Service requests a minor mail 
classification change pursuant to Secs. 3001.69 through 3001.69c. 
Parties may withdraw from the register or a particular case by filing a 
notice with the Secretary of the Commission.
    (c) When the Postal Service files a request under the provisions of 
Secs. 3001.69 through 3001.69c, it shall on that same day effect 
service by hand delivery of the complete filing to each person 
registered pursuant to subsection (b) who maintains an address for 
service within the Washington metropolitan area and serve the complete 
filing by Priority Mail service on all other registrants. Each 
registrant is responsible for insuring that his or her address remains 
current.
    (d) When the Postal Service files a request under the provisions of 
Secs. 3001.69 through 3001.69c, it shall on that same day send by 
First-Class Mail to all participants in the most recent omnibus rate 
case a notice which briefly describes its proposal. This notice shall 
indicate on its first page that it is a notice of a request for a minor 
change in mail classification to be considered under Secs. 3001.69 
through 3001.69c, and identify the last day for filing a notice of 
intervention with the Commission.
    (e) Within 5 days after receipt of a Postal Service request 
invoking the operation of Secs. 3001.69 through 3001.69c, the 
Commission shall issue a notice of proceeding and provide for 
intervention by interested parties pursuant to Sec. 3001.20. The notice 
of proceeding shall state that the Postal Service has denominated the 
mail classification change it requests a minor change, and has 
requested expedited consideration pursuant to Secs. 3001.69 through 
3001.69c. The notice shall further state the grounds on which the 
Postal Service submits that the requested change in mail classification 
is minor in character, and shall afford all interested parties 26 days 
after filing of the Postal Service's request within which to intervene, 
submit responses to the Postal Service's request for consideration of 
its proposed mail classification change under the terms of 
Secs. 3001.69 through 3001.69c, and request a hearing.
    (f) Within 28 days after publication of the notice of proceeding 
pursuant to subsection (e), the Commission shall decide whether to 
consider the request of the Postal Service as a minor classification 
change request under Secs. 3001.69 through 3001.69c, and shall issue an 
order in the proceeding incorporating that ruling. The Commission shall 
order a request to be considered under Secs. 3001.69 through 3001.69c 
if it finds that:
    (1) The requested classification change is minor in character, and
    (2) The effects of the requested change are likely to be 
appropriately limited in scope and overall impact.
    (g) If the Commission determines that the request of the Postal 
Service is not appropriate for consideration as a minor classification 
change request, no further procedures under Secs. 3001.69 through 
3001.69c shall be ordered, and the request will be considered in 
accordance with other appropriate provisions of Subpart C of this part.
    (h) If the Commission determines that the Postal Service request is 
appropriate for consideration under Secs. 3001.69 through 3001.69c, 
those respondents who request a hearing shall be directed to state with 
specificity within 14 days after publication of the notice the issues 
of material fact that require a hearing for resolution. Respondents 
shall also identify the fact or facts set forth in the Postal Service's 
filing that the party disputes, and when possible, what the party 
believes to be the true fact or facts and the evidence it intends to 
provide in support of its position.
    (i) The Commission will hold hearings on a Postal Service request 
which is considered under Secs. 3001.69 through 3001.69c when it 
determines that there are genuine issues of material fact to be 
resolved, and that a hearing is needed to resolve those issues. 
Hearings on the Postal Service request will commence within 21 days 
after issuance of the Commission order pursuant to subsection (f). 
Testimony responsive to the Postal Service request will be due 14 days 
after the conclusion of hearings on the Postal Service request.


Sec. 3001.69c  Expedited minor classification cases--time limits.

    The Commission will treat cases to which Secs. 3001.69 through 
3001.69c apply as subject to the maximum expedition consistent with 
procedural fairness. The schedule for adoption of a recommended 
decision will therefore be established, in each such case, to allow for 
issuance of such decision not more than 90 days after the filing of the 
request of the Postal Service if no hearing is held, and not more than 
120 days after the filing of the request if a hearing is scheduled.
    4. Amend part 3001 by adding subpart I, Rules for Expedited Review 
to Allow Market Tests of Proposed Mail Classification Changes, 
Secs. 3001.161 -3001.166 to read as follows:

Subpart I--Rules for Expedited Review to Allow Market Tests of 
Proposed Mail Classification Changes


Sec. 3001.161  Applicability.

    (a) This section and Secs. 3001.162 through 3001.166 apply in cases 
in which the Postal Service requests a recommended decision pursuant to 
section 3623 preceded by testing in the market in order to develop 
information necessary to support a permanent change. The requirements 
and procedures specified in these sections apply exclusively to the 
Commission's determination to recommend in favor of or against a market 
test proposed by the Postal Service, and do not supersede any other 
rules applicable to the Postal Service's request for recommendation of 
a permanent change in mail classification. In administering this 
subpart, it shall be the policy of the Commission to recommend market 
tests that are reasonably calculated to produce information needed to 
support a permanent change in mail classification, and that are 
reasonably limited in scope, scale, duration, and potential adverse 
impact. Except in extraordinary circumstances and for good cause shown, 
the Commission shall not recommend market tests of more than one year 
in duration; however, this limitation is not intended to bar the Postal 
Service from conducting more than one market test in support of a 
potential permanent change in mail classification in appropriate 
circumstances.
    (b) This section and Secs. 3001.162 through 3001.166 are effective 
November 28, 2001 through November 28, 2006.

[[Page 54442]]

Sec. 3001.162  Filing of market test proposal and supporting direct 
evidence.

    Whenever the Postal Service determines to request that the 
Commission submit a recommended decision on a change in mail 
classification preceded by testing in the market, the Postal Service 
shall file with the Commission, in addition to its request for a 
permanent change in mail classification pursuant to section 3623, a 
request for a recommended decision in favor of its proposed market test 
of the requested change in mail classification. Each formal request 
filed under this subpart shall include such information and data and 
such statements of reasons and bases as are necessary and appropriate 
fully to inform the Commission and the parties of the nature, scope, 
significance and impact of the proposed market test, and to show that 
it is in the public interest and in accordance with the policies of the 
Act and the applicable criteria of the Act. Each formal request shall 
also include the following particular information:
    (a) A description of the services to be provided in the market 
test, and the relationship between the services to be provided and the 
permanent change or changes in the mail classification schedule 
requested by the Postal Service;
    (b) A statement of each rate or fee to be charged for each service 
to be provided during the market test, together with all information 
relied upon to establish consistency of those rates and fees with the 
factors specified in section 3622(b);
    (c) A description of the number and extent of the service areas in 
which the market test will be conducted, including the number and type 
of postal facilities which will be used;
    (d) A statement of the planned duration of the market test;
    (e) Proposed Domestic Mail Classification Schedule provisions which 
incorporate the information required in paragraphs (a) through (d) of 
this section;
    (f) A statement of the goals and objectives of the proposed market 
test, supported by quantitative projections of anticipated results to 
the extent practicable.
    (g) A statement of those features of the proposed market test that, 
in the opinion of the Postal Service, cannot be modified without 
significantly impairing the value of the test;
    (h) An estimate of the number of customers who will participate in 
the market test to the extent that such an estimate is practicable, 
together with a description of the means by which the Postal Service 
plans to provide equal access to all potential users in the test market 
service areas; and
    (i) A plan for testing the proposed change or changes in the 
market, including a plan for gathering the data needed to support a 
permanent change in mail classification and for reporting the test data 
to the Commission. If periodic reporting of the test data would be 
harmful to the purposes of the test, such as by revealing information 
that might encourage competitors or mailers to take actions that would 
affect the test results, the plan may provide for presentation of the 
test data as part of the subsequent filing of data supporting a 
permanent mail classification change.


Sec. 3001.163  Procedures--expedition of public notice and procedural 
schedule.

    (a) The purpose of this section is to provide a schedule for 
expediting proceedings in which the Postal Service proposes to conduct 
a market test of a requested change in mail classification it has 
submitted to the Commission pursuant to section 3623.
    (b) Persons who are interested in participating in proceedings to 
consider Postal Service requests to conduct a market test may register 
at any time with the Secretary of the Postal Rate Commission, who shall 
maintain a publicly available list of the names and business addresses 
of all such registrants. Persons whose names appear on this list will 
automatically become parties to each proceeding in which the Postal 
Service requests to conduct a market test pursuant to this subpart. 
Other interested persons may intervene pursuant to Sec. 3001.20 within 
28 days after the filing of a formal request made under the provisions 
of this subpart. Parties may withdraw from the register or a particular 
case by filing a notice with the Secretary of the Commission.
    (c) When the Postal Service files a request under the provisions of 
this subpart, it shall on that same day effect service by hand delivery 
of the complete filing to each person registered pursuant to subsection 
(b) who maintains an address for service within the Washington 
metropolitan area and serve the complete filing by Express Mail service 
on all other registrants. Each registrant is responsible for insuring 
that his or her address remains current.
    (d) When the Postal Service files a request under the provisions of 
this subpart, it shall on that same day send by Express Mail to all 
participants in the most recent omnibus rate case a notice which 
briefly describes its proposal. This notice shall indicate on its first 
page that it is a notice of a market test request to be considered 
under Secs. 3001.161 through 3001.166, and identify the last day for 
filing a notice of intervention with the Commission.
    (e) Within 5 days after receipt of a Postal Service request under 
the provisions of this subpart, the Commission shall issue a notice of 
proceeding and provide for intervention by interested parties pursuant 
to Sec. 3001.20. In the event that a party wishes to dispute a genuine 
issue of material fact to be resolved in the consideration of the 
Postal Service's request, that party shall file with the Commission a 
request for a hearing within the time allowed in the notice of 
proceeding. The request for a hearing shall state with specificity the 
fact or facts set forth in the Postal Service's filing that the party 
disputes, and when possible, what the party believes to be the true 
fact or facts and the evidence it intends to provide in support of its 
position. The Commission will hold hearings on a Postal Service request 
made pursuant to this subpart when it determines that there is a 
genuine issue of material fact to be resolved, and that a hearing is 
needed to resolve that issue.


Sec. 3001.164  Rule for decision.

    The Commission will issue a decision on the Postal Service's 
proposed market test in accordance with the policies of the Postal 
Reorganization Act, but will not recommend modification of any feature 
of the proposed market test which the Postal Service has identified in 
accordance with Sec. 3001.162(g). The purpose of this subpart is to 
allow for consideration of proposed market tests within 90 days, 
consistent with the procedural due process rights of interested 
persons.


Sec. 3001.165  Data collection and reporting requirements.

    In any case in which the Commission has issued a recommended 
decision in favor of a market test requested by the Postal Service, and 
the Board of Governors has put the market test recommended by the 
Commission into effect, the Postal Service shall gather test data and 
report them to the Commission in accordance with the plan submitted 
pursuant to Sec. 3001.162(h). If the Postal Service's plan for 
reporting test data does not provide for periodic reporting during the 
conduct of the test, the Postal Service shall submit all test data to 
the Commission no later than 60 days following the conclusion of the 
test.


Sec. 3001.166  Suspension, continuation or termination of proceeding.

    (a) In any case in which the Commission has issued a recommended

[[Page 54443]]

decision in favor of a market test requested by the Postal Service, and 
the Board of Governors has put the market test recommended by the 
Commission into effect, the Postal Service may move for suspension of 
the proceeding in which its request for a permanent change in mail 
classification is to be considered. The Commission shall grant the 
Postal Service's motion for suspension if, in the Commission's opinion, 
it would be reasonable under the circumstances to defer consideration 
of the request until the information to be produced in connection with 
the market test becomes available.
    (b) At any time during the pendency of a market test recommended by 
the Commission pursuant to this subpart, or following the completion of 
such a market test, the Postal Service may move to revise or withdraw 
its request for a permanent change in mail classification. If the 
Postal Service moves to revise its request, it shall file with the 
Commission all data necessary to support its amended request. If the 
Postal Service moves to withdraw its request, it shall explain the 
circumstances leading to its motion, but need not produce the test data 
that would otherwise be submitted pursuant to Sec. 3001.165.

    5. Amend Part 3001 by adding Subpart J, Rules for Expedited Review 
of Requests for Provisional Service Changes of Limited Duration, 
Secs. 3001.172 through 3001.176 to read as follows:

Subpart J--Rules for Expedited Review of Requests for Provisional 
Service Changes of Limited Duration


Sec. 3001.171  Applicability.

    (a) This section and Secs. 3001.172 through 3001.176 apply in cases 
in which the Postal Service requests that the Commission recommend the 
establishment of a provisional service which will supplement, but will 
not alter, existing mail classifications and rates for a limited and 
fixed duration. The requirements and procedures specified in these 
sections apply exclusively to the Commission's determination to 
recommend in favor of or against a provisional service proposed by the 
Postal Service, and do not supersede the rules applicable to requests 
for permanent changes in rates, fees, mail classifications, and in the 
nature of postal services. In administering this subpart, it shall be 
the policy of the Commission to recommend the introduction of 
provisional services that enhance the range of postal services 
available to the public, without producing a material adverse effect 
overall on postal revenues or costs, and without causing unnecessary or 
unreasonable harm to competitors of the Postal Service. Except in 
extraordinary circumstances and for good cause shown, the Commission 
shall not recommend provisional services of more than two years in 
duration; however, the Commission may grant a request to extend a 
provisional service for an additional year if a Postal Service request 
to establish the provisional service as a permanent mail classification 
is pending before the Commission.
    (b) This section and Secs. 3001.172 through 3001.176 are effective 
November 28, 2001 through November 28, 2006.


Sec. 3001.172  Filing of formal request and prepared direct evidence.

    (a) Whenever the Postal Service determines to request that the 
Commission submit a decision recommending the establishment of a 
provisional service of limited and fixed duration, it shall file a 
request for a change in mail classification pursuant to section 3623 
that comports with the requirements of this subpart and of subpart C of 
the rules of practice. Each formal request shall include the following 
particular information:
    (1) A description of the proposed classification, including 
proposed Domestic Mail Classification Schedule language and rate 
schedules;
    (2) A statement of the goals and objectives of introducing the 
proposed provisional service, supported by quantitative projections of 
anticipated results to the extent practicable.
    (3) A statement of those features of the proposed provisional 
service that, in the opinion of the Postal Service, cannot be modified 
without significantly reducing the benefits of introducing the proposed 
service;
    (4) An explanation and complete documentation of the development of 
the rates proposed for the provisional service;
    (5) A termination date on which the proposed provisional service 
will be discontinued;
    (6) An estimate of the effect of implementing the proposed 
provisional service on overall Postal Service costs and revenues during 
the period in which it is in effect; and
    (7) A plan for meeting the data collection and reporting 
requirements specified in Sec. 3001.175.
    (b) If the Postal Service believes that data required to be filed 
under Sec. 3001.64 are unavailable, it shall explain their 
unavailability, as required by Sec. 3001.64(a)(2)(i), (ii), and (iv). 
In particular, if the provisional character of the request bears on the 
unavailability of the data in question, the Postal Service shall 
explain in detail the nexus between these circumstances. A satisfactory 
explanation of the unavailability of data will be grounds for excluding 
from the proceeding a contention that the absence of the data should 
form a basis for rejection of the request, unless the party desiring to 
make such contention
    (1) Demonstrates that, having regard to all the facts and 
circumstances of the case, it was clearly unreasonable for the Postal 
Service to propose the change in question without having first secured 
the data which are unavailable, or
    (2) Demonstrates other compelling circumstances requiring that the 
absence of the data in question be treated as bearing on the merits of 
the proposal.


Sec. 3001.173  Procedures--expedition of public notice and procedural 
schedule.

    (a) The purpose of this section is to provide a schedule for 
expediting proceedings in which the Postal Service requests that the 
Commission recommend the establishment of a provisional service which 
will supplement, but will not alter, existing mail classifications and 
rates for a limited and fixed duration.
    (b) Persons who are interested in participating in proceedings to 
consider Postal Service requests to establish a provisional service may 
register at any time with the Secretary of the Postal Rate Commission, 
who shall maintain a publicly available list of the names and business 
addresses of all such registrants. Persons whose names appear on this 
list will automatically become parties to each proceeding in which the 
Postal Service requests establishment of a provisional service pursuant 
to this subpart. Other interested persons may intervene pursuant to 
Sec. 3001.20 within 28 days after the filing of a formal request made 
under the provisions of this subpart. Parties may withdraw from the 
register or a particular case by filing a notice with the Secretary of 
the Commission.
    (c) When the Postal Service files a request under the provisions of 
this subpart, it shall on that same day effect service by hand delivery 
of the complete filing to each person registered pursuant to subsection 
(b) who maintains an address for service within the Washington 
metropolitan area and serve the complete filing by Express Mail service 
on all other registrants. Each registrant is responsible for insuring 
that his or her address remains current.

[[Page 54444]]

    (d) When the Postal Service files a request under the provisions of 
this subpart, it shall on that same day send by Express Mail service to 
all participants in the most recent omnibus rate case a notice which 
briefly describes its proposal. Such notice shall indicate on its first 
page that it is a notice of a Request for Establishment of a 
Provisional Service to be considered under Secs. 3001.171 through 
3001.176, and identify the last day for filing a notice of intervention 
with the Commission.
    (e) Within 5 days after receipt of a Postal Service request under 
the provisions of this subpart, the Commission shall issue a notice of 
proceeding and provide for intervention by interested parties pursuant 
to Sec. 3001.20. In the event that a party wishes to dispute a genuine 
issue of material fact to be resolved in the consideration of the 
Postal Service's request, that party shall file with the Commission a 
request for a hearing within the time allowed in the notice of 
proceeding. The request for a hearing shall state with specificity the 
fact or facts set forth in the Postal Service's filing that the party 
disputes, and when possible, what the party believes to be the true 
fact or facts and the evidence it intends to provide in support of its 
position. The Commission will hold hearings on a Postal Service request 
made pursuant to this subpart when it determines that there is a 
genuine issue of material fact to be resolved, and that a hearing is 
needed to resolve that issue.


Sec. 3001.174  Rule for decision.

    The Commission will issue a decision on the Postal Service's 
proposed provisional service in accordance with the policies of the 
Postal Reorganization Act, but will not recommend modification of any 
feature of the proposed service which the Postal Service has identified 
in accordance with Sec. 3001.172(a)(iii). The purpose of this subpart 
is to allow for consideration of proposed provisional services within 
90 days, consistent with the procedural due process rights of 
interested persons.


Sec. 3001.175  Data collection and reporting requirements.

    In any case in which the Commission has issued a recommended 
decision in favor of a provisional service of limited duration 
requested by the Postal Service, and the Board of Governors has put the 
provisional service recommended by the Commission into effect, the 
Postal Service shall collect and report data pertaining to the 
provisional service during the period in which it is in effect in 
accordance with the periodic reporting requirements specified in 
Sec. 3001.102. If the Postal Service's regular data reporting systems 
are not revised to include the provisional service during the period of 
its effectiveness, the Postal Service shall perform, and provide to the 
Commission on a schedule corresponding to Sec. 3001.102 reports, 
special studies to provide equivalent information to the extent 
reasonably practicable.


Sec. 3001.176  Continuation or termination of provisional service.

    At any time during the period in which a provisional service 
recommended by the Commission and implemented by the Board of Governors 
is in effect, the Postal Service may submit a formal request that the 
provisional service be terminated, or that it be established, either as 
originally recommended by the Commission or in modified form, as a 
permanent mail classification. Following the conclusion of the period 
in which the provisional service was effective, the Postal Service may 
submit a request to establish the service as a mail classification 
under any applicable subpart of the Commission's rules.

    6. Amend Part 3001 by adding Subpart K, Rules for Use of Multi-Year 
Test Periods, Secs. 3001.181-3001.182 to read as follows:

Subpart K--Rules for Use of Multi-Year Test Periods


Sec. 3001.181  Use of multi-year test period for proposed new services.

    (a) The rules in Secs. 3001.181 and 3001.182 apply to Postal 
Service requests pursuant to section 3623 for the establishment of a 
new postal service, with attendant rates, which in the estimation of 
the Postal Service cannot generate sufficient volumes and revenues to 
recover all costs associated with the new service in the first full 
fiscal year of its operation. In administering these rules, it shall be 
the Commission's policy to adopt tests periods of up to 5 fiscal years 
for the purpose of determining breakeven for newly introduced postal 
services where the Postal Service has presented substantial evidence in 
support of the test period proposed.
    (b) This section and Sec. 3001.182 are effective November 28, 2001 
through November 28, 2006.


Sec. 3001.182  Filing of formal request and prepared direct evidence.

    In filing a request for establishment of a new postal service 
pursuant to section 3623, the Postal Service may request that its 
proposal be considered for a test period of longer duration than the 
test period prescribed in Sec. 3001.54(f)(2). Each such request shall 
be supported by the following information:
    (a) The testimony of a witness on behalf of the Postal Service, who 
shall provide:
    (1) A complete definition of the multi-year test period requested 
for the proposed new service;
    (2) A detailed explanation of the Postal Service's preference of a 
multi-year test period, including the bases of the Service's 
determination that the test period prescribed in Sec. 3001.54(f)(2) 
would be inappropriate; and
    (3) A complete description of the Postal Service's plan for 
achieving an appropriate contribution to institutional costs from the 
new service by the end of the requested test period.
    (b) Complete documentary support for, and detail underlying, the 
test period requested by the Postal Service, including:
    (1) Estimated costs, revenues, and volumes of the proposed new 
service for the entire requested test period;
    (2) Return on investment projections and all other financial 
analyses prepared in connection with determining the cost and revenue 
impact of the proposed new service; and
    (3) Any other analyses prepared by the Postal Service that bear on 
the overall effects of introducing the proposed new service during the 
requested test period.

[FR Doc. 01-27090 Filed 10-26-01; 8:45 am]
BILLING CODE 7710-FW-P