[Federal Register Volume 67, Number 87 (Monday, May 6, 2002)]
[Notices]
[Pages 30405-30406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11107]


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POSTAL RATE COMMISSION

[Order No. 1339; Docket No. MC2002-1]


Classification and Fees for Confirm Service

AGENCY: Postal Rate Commission.

ACTION: Notice and order concerning Confirm service.

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SUMMARY: This document informs the public that the Postal Service has 
asked the Commission for a decision on classification and fees for 
Confirm, a new service to enable mailers to track automation 
compatible letter-size and flat mail pieces. It also establishes 
several procedural deadlines and sets a date for a prehearing 
conference and possible informal settlement discussions.

DATES: May 16, 2002: deadline for notices of intervention.
    May 20, 2002: prehearing conference (at 1 p.m.) and tentatively 
scheduled informal settlement discussion (at 9:30 a.m.) if notice is 
served on participants by the Postal Service.
    May 23, 2002: deadline for answers to conditional motion for 
waiver.

ADDRESSES: The prehearing conference will be held in the Commission's 
hearing room, 1333 H Street NW., suite 300, Washington, DC 20268-0001. 
Send notices and comments to the attention of Steven W. Williams, 
secretary, 1333 H Street NW., suite 300, Washington, DC 20268-0001.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6824.

SUPPLEMENTARY INFORMATION:

A. Authority To Consider the Service's Request

    39 U.S.C. 3622 and 3623.

B. Background

    On April 24, 2002, the Postal Service filed a request for a 
recommended decision on classification and fees for Confirm, 
a new service using PLANET Codes (a new form of bar code) to enable 
commercial mailers to track individual automation compatible letter-
size and flat mail pieces. Request of the United States Postal Service 
for a recommended decision on classification and fees for 
Confirm, April 24, 2002 (request). The request was 
accompanied by a statement of compliance with the Commission's filing 
requirements and a conditional motion for waiver. In addition, the 
Postal Service requests that proceedings to consider Confirm 
be expedited.

Establishing a Formal Docket

    The Postal Service's request was filed pursuant to sections 3622 
and 3623 of the Postal Reorganization Act, 39 U.S.C. 101 et seq. The 
Commission hereby institutes a proceeding, designated as docket no. 
MC2002-1, to consider the instant request. In the course of this 
proceeding, participants may propose alternatives to the Service's 
proposal, and the Service itself may revise, supplement, or amend its 
initial filing. The Commission's review of the Service's request, 
including any revisions, alternatives proposed by others, or options 
legally within the purview of the Service's request, may result in 
recommendations that differ from those proposed by the Postal Service 
in its initial filing.

Contents of the filing

    As a preliminary matter, the Commission has posted the request and 
related material on its website at www.prc.gov. Subsequent filings in 
this case will also be posted on the website, if provided in electronic 
format or amenable to conversion, and not subject to a valid protective 
order. Information on how to use the Commission's website is available 
online or by contacting the Commission's webmaster at 202-789-6873.
    The entire filing and related documents are also available for 
public inspection in the Commission's docket section. The docket 
section's hours are 8 a.m. to 4:30 p.m., Monday through Friday, except 
on federal government holidays. The docket section telephone number is 
202-789-6846.
    The request includes six attachments as follows. Attachment A 
contains the proposed amendments to the domestic mail classification 
schedule (DMCS); Attachment B sets forth the proposed fee schedule. 
Attachment C is the required certification concerning the accuracy of 
the cost statements and supporting data submitted as part of the 
request. Attachment D contains the audited financial statements for FY 
2000 and FY 2001. Citing USPS-LR-J-2, the Postal Service notes that the 
cost and revenue analysis report for FY 2000 was filed in docket no. 
R2001-1. Appendix E is an index of testimonies, workpapers, and 
associated attorneys. Appendix F represents the Postal Service's 
compliance statement in response to Commission rules 54 and 64, 39 CFR 
3001.54 and 3001.64.
    In support of the request, the Postal Service also submitted the 
testimony of five witnesses. Witness Bakshi, a Postal Service employee, 
describes Confirm service, its operation, and its 
implementation. See USPS-T-1. Witness Lubenow, a consultant, provides 
both background and an industry perspective concerning 
Confirm service. See USPS-T-2. Witness Nieto, a consultant, 
provides estimated test year costs in support of the proposed 
Confirm fees. See USPS-T-3. Witness Rothschild, a consultant, 
presents the results of survey research undertaken to assess the market 
demand for Confirm products at two different pricing 
scenarios. See USPS-T-4. Witness Keifer, a Postal Service employee, 
describes the proposed fee design and classification changes. Witness 
Keifer also addresses the financial impacts associated with 
Confirm. See USPS-T-5.
    In addition, the Postal Service filed two Category 2 library 
references supporting the prepared testimony: USPS-LR-1, witness 
Rothschild's (USPS-T-4) CONFIRM market research, and USPS-LR-2 
supporting spreadsheets for witness Nieto (USPS-T-3).

Brief Description of the Proposal

    The Postal Service proposes to offer Confirm in a three-
tiered subscription format, with the subscriptions labeled platinum, 
gold, and silver. As proposed, Confirm service will be 
available to users of First-Class Mail, Standard mail, and Periodicals. 
Confirm service will enable subscribers to track qualified 
outgoing and incoming mail, providing information about each mailpiece, 
e.g., the date and time processed, the processing facility, and barcode 
data.
    The proposed annual fee for a platinum subscription is $10,000, 
which entitles the subscriber to three ID codes and unlimited scans. 
The proposed annual fee for a gold subscription is $4500, entitling the 
subscriber to one ID code and 50 million scans. A silver subscription 
is available for a term of three months and entitles the subscriber to 
one ID code and 15 million scans. The proposed fee is $2000. See USPS-
T-5 at 2.

[[Page 30406]]

    As proposed, subscribers may obtain additional ID codes for $500 
per three months, or $2000 per year. Silver and gold subscribers may 
obtain additional scans, silver in blocks of 2 million scans for $500, 
and gold in blocks of 6 million scans for $750. Ibid.

Proposed Classification Changes

    The Postal Service proposes to amend the DMCS to include new 
sections 990 and 991, which, among other things, define the service, 
and describe its availability and customer requirements. A new fee 
schedule, 991, is also proposed. Request at attachments A and B.

Conditional Motion for Waiver

    In addition to attachment F, the Postal Service submitted a 
separate statement concerning its compliance with the filing 
requirements. This statement was coupled with a conditional motion for 
waiver. See statement of United States Postal Service concerning 
compliance with filing requirements and conditional motion for waiver 
(statement). The Postal Service indicates that it has supplemented 
materials developed specifically to support its request by 
incorporating testimony and documentation submitted in the recently 
concluded omnibus rate case, docket no. R2001-1. Statement at 1. The 
Postal Service suggests that this approach is justified for several 
reasons, including, among others, congruent test years (FY 2003) and a 
substantial overlap between the information required by the general 
filing requirements and that already provided in docket no. R2001-1. 
Id. at 2-3. Further, the Postal Service asserts that its compliance 
should be assessed in light of the nature of Confirm service 
and the minor extent that total cost-revenue relationships will be 
affected by its implementation. Id. at 3. The Postal Service, 
therefore, contends that it is in compliance with the Commission's 
filing requirements. Alternatively, however, the Postal Service 
requests a waiver of the filing requirements pursuant to 39 CFR 
3001.22, 3001.54(r), and 3001.64(h)(3).

Request for Expedition

    The Postal Service accompanied its filing with a precatory request 
for expedition. See United States Postal Service request for 
expedition. In support, the Postal Service states its belief that an 
early recommended decision will benefit mailers and facilitate an 
orderly transition to the proposed service and fees. The Postal Service 
emphasizes, however, that it is not advocating any schedule that would 
compromise any participants' opportunity to be heard consistent with 
due process requirements or that would otherwise limit the Commission's 
ability to develop a record on which to make its recommendations. 
Further, the Postal Service suggests that this proceeding warrants 
expeditious procedures, noting its optimism on the possibility that it 
may be settled. The Postal Service concludes with a request that ``due 
consideration be given to taking measures that would expedite 
proceedings and lead to an early Recommended Decision.'' United States 
Postal Service request for expedition at 2.

Intervention

    Each interested person wishing to be heard in this matter is 
directed to file a notice of intervention with Steven W. Williams, 
secretary of the Commission, 1333 H Street NW., suite 300, Washington, 
DC 20268-0001, on or before May 16, 2002. Each notice should specify 
whether the party seeks to participate on a full or limited basis. See 
39 CFR 3001.20 and 3001.20a. Written discovery pursuant to rules 25-28 
may be undertaken upon intervention.

Representation of Interests of the General Public

    The Commission designates Shelley S. Dreifuss, acting director of 
the Commission's office of the consumer advocate, to represent the 
interests of the general public in this proceeding, pursuant to 39 
U.S.C. 3624(a). Ms. Dreifuss shall direct the activities of Commission 
personnel assigned to assist her and, at an appropriate time, provide 
the names of these employees for the record. Neither Ms. Dreifuss nor 
the assigned personnel shall participate in or advise as to any 
Commission decision in this proceeding, other than in their designated 
capacity. Participants shall serve the OCA separately with three copies 
of all filings in addition to, and at the same time, as they effect 
service on the Commission.

Prehearing Conference Date; Informal Settlement Discussion

    The Commission will hold a prehearing conference on May 20, 2002, 
at 1:00 p.m. in the Commission's hearing room, 1333 H Street NW., suite 
300, Washington, DC 20268-0001. In light of the Postal Service's 
statement concerning the prospects of settling this proceeding, the 
Commission will make its hearing room available at 9:30 a.m. on May 20, 
2002 for the participants to engage in informal settlement discussions. 
If such discussions are scheduled, the Postal Service should provide 
notice to all participants. At the prehearing conference, the Postal 
Service shall present a status report concerning settlement 
discussions, if any.

Ordering Paragraphs

    It is ordered:
    1. Docket no. MC2002-1 is established to consider the Postal 
Service's request for a recommended decision on classification and fees 
for Confirm service.
    2. The Commission will sit en banc in this proceeding.
    3. Notices of intervention are due no later than May 16, 2002.
    4. A prehearing conference will be held May 20, 2002 at 1:00 p.m. 
in the Commission's hearing room.
    5. Answers to the Postal Service's conditional motion for waiver 
are due May 23, 2002.
    6. Shelley S. Dreifuss, acting director of the Commission's office 
of the consumer advocate, is designated to represent the interests of 
the general public.
    7. The Secretary shall cause this notice and order to be published 
in the Federal Register.

    Dated: April 29, 2002.
Steven W. Williams,
Secretary.
[FR Doc. 02-11107 Filed 5-3-02; 8:45 am]
BILLING CODE 7715-01-P