[Federal Register Volume 66, Number 220 (Wednesday, November 14, 2001)]
[Rules and Regulations]
[Pages 56993-56996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28547]


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POSTAL SERVICE

39 CFR Part 111


Delivery of Mail to a Commercial Mail Receiving Agency

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule amends section D042.2.0 of the Domestic Mail 
Manual (DMM) by adding section D042.2.8 to provide procedures to 
identify when an office business center (OBC) or part of its operation 
is considered a commercial mail receiving agency (CMRA) for postal 
purposes.

EFFECTIVE DATE: December 14, 2001.

FOR FURTHER INFORMATION CONTACT: Denise Love, 703-292-3743.

SUPPLEMENTARY INFORMATION: On July 11, 2001, the Postal Service 
published in the Federal Register a proposed rule to add section 
D042.2.8 to the Domestic Mail Manual (66 FR 36224-362260). In order to 
accommodate requests for additional time, the Postal Service extended 
the comment period to September 17, 2001 (66 FR 40663-40664). The 
proposed rule provided procedures to identify when an office business 
center (OBC) (sometimes called corporate executive center) or part of 
its operation is considered a commercial mail receiving agency (CMRA), 
for postal purposes.

Background Summary

    It is expected that this notice of proposed rulemaking (NPRM) will 
be the culmination of an effort by the Postal Service to update and 
clarify its standards concerning the delivery of mail to CMRAs. The 
Postal Service has long had rules applicable to CMRAs. Approximately 5 
years ago, following reviews demonstrating confusion regarding some of 
the standards and noncompliance in some instances, the Postal Service 
reviewed the standards and provided useful clarifications and 
modifications consistent with changes in the nature of the industry and 
the needs of postal customers. The initial revisions were published in 
the Federal Register (64 FR 14385-14391) on March 25, 1999.
    Traditional CMRAs provide, as a principal service, mail receipt 
services for their customers. Thus, they provide a mailing address and 
customers either pick up mail at an assigned ``private mailbox'' 
provided at the physical location of the CMRA, or they have the mail 
re-mailed to their actual address or another address they supply to the 
CMRA. The Postal Service has long required that individuals or 
businesses desiring the Postal Service to deliver their mail to a CMRA 
fill out a postal form (PS Form 1583, Application for Delivery of Mail 
Through Agent) authorizing delivery by the Postal Service. As part of 
this process, CMRAs have long been required to verify the party's 
identity. Additionally, CMRAs have also been required to register with 
their local Post Office. Among other things, the initial NPRM clarified 
these requirements. As part of its efforts, the Postal Service also 
updated PS Form 1583 and, for the first time, provided a standard 
``registration'' form (PS Form 1583-A, Application to Act as a 
Commercial Mail Receiving Agency) for CMRAs.
    The initial NPRM (64 FR 14385-14391), along with modifications that 
followed, addressed other issues. For example, based on privacy 
concerns expressed by some customers, particularly those working out of 
their homes and domestic violence victims, the Postal Service modified 
existing rules to limit the release of information (65 FR 3857-3859). 
The Postal Service also clarified the responsibility of CMRAs to re-
mail mail addressed to former clients, significantly reducing the 
length of that obligation. The Postal Service also adopted addressing 
standards for CMRA addresses; no specific postal standards previously 
existed. Nothing in CMRA regulations had prohibited CMRA customers from 
citing the ``PMB'' (private mailbox) number assigned by the CMRA as a 
``suite,'' even though this may have led some correspondents to believe 
the CMRA customer to be located at a physical office at the CMRA street 
address. Under the new standard, CMRA customers are now given the 
option of using ``PMB'' or the alternative ``#'' sign to designate the 
private mailbox assigned by the CMRA.
    As the Postal Service has become aware, CMRA-type services are now 
offered by businesses other than traditional CMRAs. These businesses 
may primarily offer services other than CMRA services, but as an 
additional business also offer CMRA services. For example, some firms 
offering storage units may also erect mailboxes and provide mail 
receipt services to some of their customers. The CMRA rules are 
applicable to all businesses that provide agent-mailing services to 
their customers, whether or not the ``CMRA'' label is used to describe 
the business. Customers of those businesses that receive CMRA-type 
services are required to follow the same procedures as CMRA customers.
    An OBC is another type of business that may provide CMRA-type 
services to some customers. Generally, OBCs provide private office 
space for customers along with other business support services. 
However, some OBCs have customers who do not rent private office space, 
but only use the OBC for mail receipt (and sometimes other business 
support services as well). These customers may rent meeting rooms or 
offices from the OBC on an as-needed basis. Other customers may rent 
private office space on a part-time basis. These customers generally 
are not assigned a specific private office for their use, but are 
assigned to use one of the open private offices in the OBC when they 
choose to use their allotted time. Customers using private offices on a 
full- or part-time basis also receive mail at the OBC address. The 
policy of the Postal Service has long been that OBCs who offer and OBC 
customers who receive CMRA-type service should follow the same 
procedures as CMRAs and CMRA customers. However, the Postal Service had 
not published clear guidelines in this area. During its review of the 
CMRA standards, the Postal Service was asked to publish such 
guidelines.
    Before formally proposing such rules, the Postal Service asked 
interested parties for their views. Some principles appear relatively 
clear. OBC customers who rent private office space on a full-time basis 
should not be considered CMRA customers. Although they do receive mail 
at the OBC address, that is incidental to their tenancy. In contrast, 
OBC customers who contract for mail and other business support services 
and are not physically located at the OBC address should be treated as 
CMRA customers. The difficult question is the treatment of OBC 
customers who contract for private office space on a part-time basis, 
for example, what part-time customers should be treated as CMRA 
customers for postal purposes? The Postal Service does not believe that 
all part-time customers should be considered CMRA customers. However, 
as the right to occupy space decreases, the Postal Service believes 
that, at some point, mail service becomes a primary service for the 
customer rather than incidental to occupancy of private office space.
    The purpose of the Postal Service's rulemaking efforts concerning 
OBCs was to provide guidance when an OBC or a

[[Page 56994]]

part of its operation is considered a CMRA for the purpose of postal 
standards. During the discussions held before rules were formally 
proposed, interested parties suggested that the test be based on the 
existence of a right to occupy private office space at the OBC. The 
test also included the payment of a monthly fee of at least $125 for 
private office occupancy and a listing in the office directory, if 
available, and conference rooms and other business support services on 
demand. The Postal Service published this as a proposed test in the 
February 2, 2000, Federal Register (65 FR 4918). However, based on the 
comments received, many of which criticized the $125 test, the Postal 
Service determined to revise its NPRM. Again, the Postal Service 
discussed the issue with interested parties and an attempt was made to 
attain a consensus based on the number of private office hours for 
which the OBC customer contracted. Some parties wanted a relatively low 
number and others, a higher number. No consensus was reached. 
Accordingly, the Postal Service published a revised NPRM.

Discussion of Comments Received

    Comments on the NPRM were due on or before August 10, 2001. At the 
request of a commenter representing the OBC industry (and echoed by 
several other commenters), the Postal Service reopened the public 
comment period with written comments due on or before September 17, 
2001 (66 FR 40663-40664). The Postal Service received a total of 117 
comments. Of the total comments, 64 were from individual owners or 
officers of OBCs, 41 from OBC customers, one from the OBC industry 
association, and one from a not-for-profit membership organization. 
These comments were largely identical in content and format, and 
generally opposed the NPRM asserting that OBC part-time customers 
should not be considered as CMRA customers. The Postal Service received 
10 comments that generally opposed the NPRM asserting that exemption 
from CMRA rules should only be for those OBC customers that occupy 
private office space and physically conduct business at the address 
indicated. CMRA owners, franchisers, the CMRA industry association, a 
Member of Congress, and the National Association of Attorneys General, 
representing 48 states and the District of Columbia and Puerto Rico, 
submitted these comments. A number of comments also appeared to include 
views on the CMRA rules that were previously adopted. These comments 
are outside the scope of this NPRM.
    As foreshadowed in some of the preproposal discussions described 
above, there was no dominant view expressed by the commenters. While 
all were critical of the NPRM to some extent, there was no consensus as 
to the preferred change. That is, some urged a test so that fewer OBC 
customers would be considered CMRA customers for postal purposes, while 
others urged a test so that more OBC customers would be considered CMRA 
customers. If anything, the NPRM appeared to constitute a middle ground 
among the commenters.

View--Fewer OBC Customers Considered as CMRA Customers

    Commenters opposed to consideration of OBC customers as CMRA 
customers rely on the assertion that the North American Industry 
Classification System (NAICS) classifies the OBCs and CMRAs with 
different industry codes. They believe this defines the two as 
fundamentally different types of businesses. Also, some commenters 
suggested that, in economic terms, the Postal Service is attempting to 
bias competition in a market broader than mail receipt.
    The Bureau of Census uses the NAICS in economic surveys to collect 
data about business activity. The NAICS separates businesses within a 
primary industrial activity and collects data on the number of 
establishments, employment, payroll, sales, receipts, or shipments 
within that segment.
    The NPRM does not attempt to classify an OBC and a CMRA as the same 
type of business, nor does it classify all OBC customers as CMRA 
customers. Rather, the NPRM is based on the principal that persons 
receiving similar services should be treated in a similar manner under 
our standards, regardless of the label placed on the business providing 
the service.
    One commenter stated that ``USPS initiated the extension of the 
CMRA regulations to OBC operations at the behest of the mail and 
package stores within the scope of its initial NPRM.'' The commenter 
also suggested that the purpose of the NPRM is to protect the 
competitive interests of CMRA stores, including the operations of the 
Postal Service subject to the CMRA regulations.
    It is hardly surprising that comments from the OBC industry would 
seek to serve the economic interests of OBCs, just as it is no surprise 
that comments from the CMRA industry sought to protect its economic 
interests. There is nothing improper in this. Indeed, such comments are 
extremely useful to the rulemaking process by ensuring that the Postal 
Service understands the potential consequences of any rules. As the 
Postal Service has made clear throughout this rulemaking process, the 
final rules seek to balance numerous interests. These include both 
economic and consumer interests, represented by diverse parties such as 
individual postal customers and mailers, domestic violence victims, 
businesses of all sizes, OBCs, CMRAs, and law enforcement entities. No 
group has been favored in this process.
    It is also important to note that, contrary to the apparent belief 
of these commenters, Post Office box service is not subject to CMRA 
regulations. However, the CMRA regulations were designed using current 
Post Office box regulations and are similar. Both sets of standards 
were designed to serve consumer protection interests. During the CMRA 
rulemaking process, we revisited the Post Office box regulations and 
made revisions to enhance protection for the American public.
    Other commenters observed that they may change their agreements 
with OBCs from year to year and, under the 16-hour standard, might be 
considered OBC customers in some years and CMRA customers in others. 
They cited a concern that this might require new stationery in order 
for them to comply with addressing standards. That is not the case 
however, since they might use the alternative ``#'' sign to signify 
their secondary addresses in either instance.
    One commenter asserted that, if his corporation were deemed a CMRA 
customer, the state would revoke its charter under state law. Questions 
concerning eligibility for state charters are a matter of state, not 
postal law, and the Postal Service has no wish to be involved in such 
decisions. States are certainly not required, or encouraged, to 
incorporate postal standards into their corporate laws. In this 
instance, the rules in issue are postal addressing standards that are 
intended to enable correspondents to determine if the sender is 
physically located at the address provided. The Postal Service does not 
take any position on whether a corporation considered as a CMRA 
customer for purposes of postal standards should be authorized to 
receive a charter under state laws. Rather, that question is one that 
should be decided by each state and its citizens.

View--More OBC Customers Considered as CMRA Customers

    The Postal Service received a comment from a state government 
concerned that ``State anti-fraud efforts be permitted to coexist with 
the Postal Service's CMRA rules.'' The commenter asked the Postal 
Service to ``expressly

[[Page 56995]]

take a position that state laws that are more protective of consumers 
than the CMRA rules are not preempted.'' Questions as to whether postal 
statutes and regulations preempt state laws ultimately are legal issues 
for decision by appropriate courts. Except to the extent necessary to 
fulfill postal responsibilities, the Postal Service does not desire to 
interfere with state activities and understands that state statutes 
will not be held preempted by postal laws and regulations except to the 
extent that there is a conflict between them. United States Postal 
Service v. Council of Greenburgh Civic Associations, 453 U.S. 114 
(1981); United States v. City of Pittsburg, California, 661 F.2d 783 
(9th Cir. 1981). We expect these instances regarding state regulation 
of CMRAs to be rare. For instance, postal regulations provide that CMRA 
customers use one of these options as secondary address designations: 
``PMB'' or the alternative ``#.'' If a state were to prescribe that 
customers subject to its rules use only one of these options, that 
would comply with postal standards. However, if the state were to 
prescribe that a third option be used (e.g. ``CMRA Box''), that would 
conflict with postal standards and should be preempted.
    Some commenters who urged that more part-time OBC customers be 
treated as CMRA customers for postal purposes stated that the proposed 
rule places CMRAs and their customers at a competitive disadvantage. 
Several commenters pointed out that the 16-hour standard per month 
represents only 2 days (10 percent) of the standard 20-day work month, 
and that the rule does not require occupancy, only payment for the 
right of occupancy. The commenters assert that without standards 
requiring an actual and increased physical presence at the location, it 
was unlikely that individuals would be able to find the OBC customer at 
the address, even though their mailing address would imply a physical 
presence there. Given that, these commenters asserted that there would 
be little practical difference between these OBC customers and those at 
CMRAs. Some commenters also pointed out the potential danger that some 
customers seeking no more than mail service might be willing to 
contract for private office space with the OBC, even without any intent 
to occupy the space. Finally, one commenter also stated that the 
consequences of being considered a CMRA customer (rather than an OBC 
customer) for postal purposes are relatively light in any case.
    There likely is merit to each of these points. The Postal Service 
recognizes the need to balance all interests here, including economic, 
consumer, and mailer concerns. Adopting occupancy standards and 
increasing the 16-hours standard, although likely to yield some 
consumer protection benefits, would likely impose additional costs on 
OBCs and their customers. The Postal Service believes it appropriate to 
err on the side of caution and has determined not to change these 
standards--with one exception. Section D042.2.8 (b)(2) has been revised 
to make clear that agreements for the right to private office space at 
an OBC must be made at an appropriate market rate for the location. 
This is intended to ensure that customers seeking CMRA-type service 
from an OBC cannot circumvent the intent of these standards by the 
inclusion, in their service agreements with the OBC, of a provision 
granting them the right to occupy office space for a nominal fee.
    To minimize implementation costs for OBCs and their CMRA customers 
to comply with the adopted rules in section 2.8, 2.5 through 2.7, and 
all other applicable postal standards, the Postal Service has 
established the following timeline for compliance to the rules by the 
OBC and its CMRA customers:
    1. OBCs with CMRA customers must complete Form 1583-A to register 
as a CMRA and submit it to their local postal delivery office within 30 
days of the effective date of this rule;
    2. OBC customers considered CMRA customers must complete Form 1583 
and submit it to the OBC within 90 days of the effective date of this 
rule; and
    3. The Postal Service is extending the deadline for compliance by 
OBC CMRA customers with section D042.2.6e, addressing standards, until 
November 1, 2002. This allows OBC CMRA customers to advise 
correspondents of their new address and to deplete existing stationery 
in the ordinary course of business. This timeline is similar to that 
established for CMRA customers after the earlier rulemakings.
    For the reasons discussed above, the Postal Service hereby adopts 
the following amendments to the Domestic Mail Manual, which is 
incorporated by reference into 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. The Domestic Mail Manual (DMM) is amended by revising module D 
to read as follows:

Domestic Mail Manual (DMM)

* * * * *

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 other 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 
by completing PS Form 1583-A, Application to Act as a Commercial Mail 
Receiving Agency, 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 support 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

[[Page 56996]]

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 
facility for at least 16 hours per month at market rate for the 
location;
    (B) Full-time receptionist 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 might be basis for suspending delivery service to the 
OBC under the procedures set forth in 2.6f through h.
* * * * *
    Notice of issuance of the transmittal letter will be published in 
the Federal Register as provided by 39 CFR 111.3.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 01-28547 Filed 11-13-01; 8:45 am]
BILLING CODE 7710-12-P