[Federal Register Volume 69, Number 15 (Friday, January 23, 2004)]
[Proposed Rules]
[Pages 3288-3292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1389]


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POSTAL RATE COMMISSION

39 CFR Part 3001

[Docket No. RM2004-1; Order No. 1389]


Definition of Postal Service

AGENCY: Postal Rate Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission hereby provides notice that it is initiating a 
proposed rulemaking for the purpose of adding a definition of the term 
``postal service'' to its rules of practice. This change is intended, 
among other things, to clarify Commission jurisdiction and thereby 
minimize the need for ad hoc determinations.

DATES: Initial comments are due March 1, 2004; reply comments are due 
April 1, 2004.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system, which can be accessed at http://www.PRC.gov.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6820.

SUPPLEMENTARY INFORMATION:

Regulatory History

68 FR 14437 (March 25, 2003)

    The Commission's rules of practice and procedure, 39 CFR 3001.1 et 
seq., do not define the term ``postal service.'' Historically, this 
omission has created little confusion or controversy. Of late, however, 
that would appear no longer to be the case. See PRC Order No. 1388, 
January 16, 2004. Consequently, in the interests of administrative 
efficiencies, the Commission proposes to amend its rules to define the 
term ``postal service.''

1. Background

    In only a relatively few proceedings has the Commission been called 
upon to consider, for jurisdictional purposes, the meaning of the term 
``postal service.'' The first instance involved special services, over 
which, the Postal Service had contended, it had unilateral rate setting 
authority. In Docket No. R76-1, following the District Court's decision 
in Associated Third Class Mailer Users v. U.S. Postal Service,\1\ the 
Commission addressed the issue of which special services fell within 
its rate jurisdiction. In considering those that might properly be 
characterized as ``postal services,'' the Commission determined 
that:\2\
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    \1\ Associated Third Class Mailer Users v. U.S. Postal Service, 
405 F.Supp. 1109 (D. D.C. 1975); National Association of Greeting 
Card Publishers v. U.S. Postal Service, 569 F.2d 570 (D.C. Cir. 
1976); vacated on other grounds, 434 U.S. 884 (1977).
    \2\ PRC Op. R76-1, Vol. 1, June 30, 1976, at 266-67 (footnote 
omitted).

[s]pecial postal services `` that is, those which fall within the 
ambit of Sec.  3622--are services other than the actual carriage of 
mail but supportive or auxiliary thereto. They enhance the value of 
service rendered under one of the substantive mail classes by 
providing such features as added security, added convenience or 
speed, indemnity against loss, correct information as to the current 
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address of a recipient, etc.

    Nearly two decades elapsed before the Commission again confronted 
the issue as presented in a series of complaints filed in 1995 and 
thereafter.\3\ In Docket No. C95-1, the Commission considered a 
complaint concerning shipping and handling charges for orders placed 
with the Postal Service Philatelic Fulfillment Service Center. Finding 
first that complaints regarding fees for postal services fell within 
the scope of section 3662, the Commission dismissed the complaint based 
on the court's reasoning in Associated Third Class Mailer Users v. U.S. 
Postal Service, supra.\4\ Specifically, the Commission found that the 
handling and shipping of catalog orders placed with the Philatelic 
Fulfillment Service Center were not closely related to the delivery of 
mail and, thus, charges for those services did not constitute fees for 
postal services under section 3662.\5\
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    \3\ Jurisdictional issues were addressed in Docket No. MC78-3 
concerning the Postal Service's request for a recommended decision 
to establish an Electronic Computer Originated Mail subclass.
    \4\ PRC Order No. 1075, September 11, 1995, at 4-5.
    \5\ Id. at 5.
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    Subsequently, Docket No. C96-1 involved a complaint that the Postal 
Service was operating and charging fees for a packaging service (Pack & 
Send) that had not been submitted to the Commission for a recommended 
decision.\6\ The complainant, a coalition comprised of organizations 
and individuals doing business in the Commercial Mail Receiving Agency 
industry, alleged, inter alia, that the Postal Service was charging 
rates that did not conform with the policies of the Postal 
Reorganization Act. In reviewing the record and the parties' arguments, 
the Commission recognized that ``there are a variety of analytical 
lenses through which potential relationships to customary postal 
functions may be usefully viewed.''\7\ To that end, the Commission 
analyzed whether Pack & Send service should be characterized as a 
postal or nonpostal service by, among other things, considering its 
relationship to the Postal Service's nonpostal statutory functions, its 
intrinsic and structural features, and the correlation between its use 
and subsequent mailing. Based on its analyses, the Commission found 
Pack & Send to be a postal service due to, among other things, its 
direct structural relationship to the provision of postal services (as 
a wholly new method of accepting mailable matter for delivery) as well 
as its intrinsic value as an added-value service available for certain 
categories of parcel service offered by the Postal Service.\8\
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    \6\ See Complaint of Coalition Against Unfair USPS Competition, 
Docket No. C96-1, May 23, 1996.
    \7\ PRC Order No. 1145, December 16, 1996, at 12 (footnote 
omitted).
    \8\ Id. at 18-19; see also id. at 11-18. Following this finding, 
the Commission held further proceedings in Docket No. C96-1 in 
abeyance pending a filing by the Postal Service requesting a 
recommended decision concerning Pack & Send service, or the filing 
of a notice by the Service indicating that the packaging service was 
discontinued. Id. at 25. Further proceedings proved unnecessary as 
the Postal Service chose to discontinue Pack & Send service. PRC 
Order No. 1171, April 25, 1997.
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    In Docket No. C99-1, United Parcel Service filed a complaint 
contending that the Postal Service was providing a new service, Post 
Electronic Courier Service (Post ECS), in violation of the Act.\9\ Post 
ECS service, a pilot program available only to licensees, offered an

[[Page 3289]]

all-electronic means of transmitting documents securely via the 
Internet.\10\ The Postal Service moved to dismiss the complaint 
arguing, first, that the Commission lacks authority to determine the 
status of the service as either postal or nonpostal, and second that, 
even assuming the Commission had authority to determine the status of 
Post ECS service, the complaint should be dismissed as beyond the 
Commission's authority because the service is neither postal nor 
domestic.\11\ The Commission denied the motion, finding that its mail 
classification authority empowered it to review the status of services 
proposed or offered by the Postal Service.\12\ Nor was the Commission 
persuaded, based on the record developed to that point, that the 
service did not include domestic operations or that it was nonpostal. 
In that regard, the Commission did not find it dispositive that service 
did not entail hardcopy mail.\13\ For purposes of ruling on the motion 
to dismiss, the Commission, however, did not decide whether Post ECS 
was, or was not, a postal service.\14\ That issue, which was deferred 
pending further proceedings in the docket, was not reached as the 
complaint was subsequently dismissed as moot.\15\
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    \9\ See Complaint of United Parcel Service, Docket No. C99-1, 
October 5, 1998. UPS's complaint was based on three claims: (a) That 
the service may only be established pursuant to sections 3622 and 
3623 of the Act; (b) that the provision of the service at no charge 
violates sections 3622(b)(3) and 3622(b)(4); and (c) that Post ECS 
represents a change in the nature of postal services affecting 
service on a nationwide or substantially nationwide basis.
    \10\ Briefly, licensees could transmit documents to a Postal 
Service Electronic Commerce Server whereupon the Postal Service 
would notify the addressee by e-mail that the document was available 
at a specified URL address. To retrieve the document, the addressee 
would access the site, enter the appropriate password, and, if 
desired, download the document.
    \11\ Motion of the United States Postal Service to Dismiss, 
Docket No. C99-1, November 5, 1998.
    \12\ PRC Order No. 1239, May 3, 1999, at 12.
    \13\ Id. at 15-21.
    \14\ Id. at 20-21.
    \15\ PRC Order No. 1352, November 6, 2002. Because it terminated 
Post ECS service, the Postal Service moved to dismiss the complaint 
as moot.
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    The most recent proceedings in which jurisdictional issues have 
been raised share a common theme. In the latest rate proceeding, Docket 
No. R2001-1, interrogatories were filed by the Office of Consumer 
Advocate (OCA) requesting information concerning various services 
offered by the Postal Service, including, for example, Post ECS, USPS 
eBillPay, and USPS Send Money. The Postal Service objected to these 
interrogatories, characterizing the services as nonpostal and 
irrelevant to the rate proceeding. OCA sought to compel production. The 
Postal Service was directed to respond to certain interrogatories, but 
this ruling was suspended in light of the settlement filed in that 
proceeding that ultimately became the basis for the Commission's 
recommended decision.\16\
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    \16\ See P.O. Ruling R2001-1/42, January 29, 2002, at 5-11 and 
13.
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    Finally, the petition filed by Consumer Action, addressed 
separately in companion Order No. 1389, requests the Commission to 
initiate proceedings concerning 14 services offered to the public by 
the Postal Service without prior Commission approval. The 14 services 
identified encompass not only electronic services, including online 
payment services, electronic postmark, and NetPost Certified, but also 
miscellaneous other services, ranging from retail merchandise to the 
Unisite Antenna Program. While issues related to the petition are fully 
addressed in Order No. 1389, it is sufficient to note, for purposes of 
this discussion, that the Postal Service characterized all of the 
services identified in the petition as nonpostal.\17\
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    \17\ The Report by the President's Commission on the Postal 
Service touches on the issue of electronic mail, noting that ``the 
online revolution dramatically blurred the lines of what constitutes 
a ``postal service,'' producing some dubious forays.'' The 
President's Commission recommends that the Postal Service abandon 
electronic services and focus on traditional mail. Report of the 
President's Commission on the United States Postal Service, July 31, 
2003, at 27.
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    Prior to Docket No. C99-1, the Commission had three occasions to 
consider an electronic service provided by the Postal Service. Each has 
some bearing on issues to be considered in this proceeding.
    In Docket Nos. MC76-1-4, the Commission approved a stipulation and 
agreement concerning Mailgram service.\18\ Under the terms of the 
settlement, the parties stipulated that Mailgram service was a 
communications service subject to regulation by the Federal 
Communications Commission and not a postal service subject to 
regulation by this Commission. While the Commission concurred that 
Mailgram service need not be included in the Domestic Mail 
Classification Schedule (DMCS), it rejected the inference that the 
parties to the settlement could stipulate away the Commission's 
jurisdiction.\19\ Furthermore, the Commission specifically noted that 
its ``decision is without prejudice to our future consideration of any 
other alternative communications methods or our jurisdiction thereof.'' 
\20\
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    \18\ PRC Op. Docket Nos. MC76-1-4, June 15, 1977.
    \19\ Id. at 4-5. This finding was based on two considerations: 
(a) that the general public could not obtain this service from the 
Postal Service, and (2) the service was regulated by the FCC.
    \20\ Id. at 6.
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    The principal issue presented in Docket No. MC78-3, concerning 
Electronic Computer Originated Mail (E-COM), was whether the Postal 
Service should enter the field of electronic mail.\21\ The Postal 
Service's proposal consisted essentially of two electronic 
transmissions, the first from the mailer to a Western Union facility 
located in Virginia, and the second from that facility to one of 25 
serving post offices. Under its proposal, the Postal Service would 
provide both data processing services and data transmission services. 
As proposed, the Postal Service would control the mailer's messages 
from the time they arrived at Western Union's facility until they were 
delivered to the addressee.\22\ Regarding its proposal, the Postal 
Service maintained the position that E-COM messages, while in 
electronic form, were deemed `` in the mails.'' \23\
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    \21\ PRC Op. Docket No. MC78-3, December 17, 1979, at 1.
    \22\ Id. at 29.
    \23\ Id. at 172 (footnote omitted).
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    The Commission also had before it an alternative proposal that 
differed from E-COM in an important respect. While both would make use 
of the Postal Service's delivery network, the alternative would be 
available to any common carrier connecting its transmission facilities 
to the Postal Service's data processing and printing facilities. For a 
variety of reasons, the Commission ultimately recommended the 
alternative proposal.\24\ Among the factors influencing this decision 
were the pro-competitive aspects of the alternative as well its 
jurisdictional implications.\25\
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    \24\ Although not dispositive, the Commission noted that prior 
to its decision, the contract between Western Union and the Postal 
Service was cancelled. See id. at 3-4.
    \25\ See generally Id. at 6-11.
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    During the pendency of Docket No. MC78-3, the Carter Administration 
issued a policy statement outlining its position concerning the Postal 
Service's role in providing electronic mail service.\26\ The Commission 
addressed the applicability of the eight conditions in the policy 
statement to the proposals before it, and, among other things, 
concluded that the Postal Service should make its delivery services 
available to all electronic carriers at the same rates as those it 
charges itself. ``We find * * * that this rate constraint is required 
not only by Sec. Sec.  403(c), 3622 (b)(1) and 3623 (c)(1) of the Act, 
but by Sec.  3622(b)(4). * * *'' \27\ Moreover, in discussing a related 
condition, which concerned developing technical interconnecting 
standards to ensure equal access to the mail delivery system, the 
Commission found that Sec.  101(f), as relates to modes of 
transportation, is applicable to telecommunication

[[Page 3290]]

carriers.\28\ In December 1984, the Commission recommended, pursuant to 
a request from the Postal Service, that E-COM be eliminated from the 
DMCS.\29\
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    \26\ Id. at 159.
    \27\ Id. at 171.
    \28\ Id. at 175-176. The Commission noted that the Postal 
Service also appeared to regard electronic media as equivalent to a 
mail transportation mode. Id. at 176.
    \29\ PRC Op., Docket No. MC84-2, December 21, 1984.
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    Mailing Online represents the Postal Service's third attempt to 
provide electronic mail service. Pursuant to a request filed by the 
Postal Service in November 1999, the Commission recommended that 
Mailing Online be implemented as a three-year experiment. Mailing 
Online provided electronic transmission of documents to the Postal 
Service via the Internet for printing, finishing, and posting as hard 
copy mail. Upon receipt of the data files containing the document and 
related information, such as the address list and printing options, the 
Postal Service performed various tasks, such as address hygiene and 
merging of names and addresses with document files, to create print-
image files to be sent to commercial printing contractors. The latter 
would print and finish the documents, prepare them for mailing, and 
enter the pieces at a local postal facility for delivery.\30\ By letter 
dated August 29, 2003, the Postal Service gave notice that Mailing 
Online service would be terminated as of September 1, 2003.\31\
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    \30\ For a more complete description of Mailing Online, see PRC 
Op. MC2000-2, June 21, 2000, at 1-3.
    \31\ Letter to the Honorable Steven W. Williams, Docket No. 
MC2000-2, August 29, 2003.
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2. Rationale for the Rule

    As this background underscores, the postal character of new 
services provided by the Postal Service is unsettled. Because the issue 
appears to be increasingly controversial, the Commission has determined 
that it would be administratively most efficacious to clarify it by 
rule rather than on an ad hoc basis.
    The concept of ``postal service'' is not static. It is 
evolutionary, with technology driving the change. For example, to 
transport the mails, the Postal Service originally relied on 
stagecoaches. In the 1800's, railroads were used to provide faster 
service. In the 20th century, trucks and airplanes became the dominant 
means to transport the mails. The Postal Service has characterized its 
entry into the electronic mail field as ``a natural progression of 
technology,'' by using ``electronics to move the mail'' instead of a 
surface or air carrier. \32\ The Postal Service's position was 
instrumental in the Commission's determination that section 101(f) of 
the Act is applicable to telecommunications carriers.\33\
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    \32\ Initial Brief of the United States Postal Service, Docket 
No. MC78-3, November 9, 1979, at 9. In that proceeding, the Postal 
Service argued that ``E-COM service fits squarely within the scheme 
of transmitting messages envisioned by the Postal Reorganization 
Act. * * * The E-COM proposal keeps pace with advances in technology 
* * * by utilizing electronics to move mail, instead of utilizing [a 
surface or air carrier].'' Ibid.
    \33\ See PRC Op. MC78-3, December 17, 1979, at 175-76.
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    It is not merely that these technological advances provided for 
improved service, rather they gave rise to wholly new forms of ``postal 
service.'' Examples include airmail service, Express Mail services, as 
well as electronic mail. In addition, technology has given rise to many 
new types of special postal services such as Confirm, and delivery and 
signature confirmation.
    The point is that the character of services provided by the Postal 
Service has changed with advances in technology. It is a trend that may 
accelerate as the Postal Service considers how it may wish to employ 
advances in technology to satisfy its statutory mandate to provide 
prompt, reliable, and efficient services.\34\ The recent proceedings 
before the Commission give evidence of the Postal Service's efforts to 
employ the latest technology. For example, services provided by the 
Postal Service that rely, in some fashion, on the Internet include 
NetPost CardStore, NetPost Certified Mail, Mailing Online,\35\ 
Returns@Ease, online payment services,\36\ and electronic postmark.
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    \34\ 39 U.S.C. Sec.  101(a).
    \35\ As noted above, the Postal Service terminated Mailing 
Online as of September 1, 2003. Letter to the Honorable Steven W. 
Williams, Docket No. MC2000-2, August 29, 2003.
    \36\ These include USPS eBillPay, USPS Send Money, and USPS 
Pay@Delivery. With respect to USPS eBillPay, the Postal Service 
indicates it has informed CheckFree Corporation that it will not 
renew its contract upon its expiration in April 2004. In addition, 
the Postal Service states that, as of that date, it will no longer 
offer either USPS Send Money or USPS Pay@Delivery, since both are 
features of its agreement with CheckFree. See Update to Report on 
Nonpostal Initiatives, November 14, 2003 (Update). Nonetheless, the 
Postal Service's website indicates that these services remain 
available without any reference to their apparent discontinuance as 
of April 2004.
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    The Postal Service has also offered an array of other services not 
reliant on the Internet whose operations may or may not have postal 
implications. These services include, inter alia, Mall Package Shipment 
Program, a pilot program offering pickup service to select 
merchants,\37\ LibertyCash, a stored value card for use in purchasing 
postage and related products,\38\ and Unisite Antenna Program, which 
concerns leasing Postal Service real estate for wireless communication 
towers.
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    \37\ The Postal Service indicates it has terminated this 
program. Update.
    \38\ The Postal Service indicates it has terminated this 
program. Ibid.
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    Many of the latest services, particularly those relying on 
electronic communications, share a common bond with the Postal 
Service's initial forays into electronic mail. A principal impetus for 
the Postal Service to offer electronic mail service was an early 
concern that its message market share would be substantially reduced, 
based on projections that seven out of eight domestic messages would be 
lost to other carriers.\39\ Today, the concern over electronic 
diversion continues to drive the Postal Service's efforts to generate 
increased revenues and to serve the public's communications needs. Even 
if its earlier efforts proved unsuccessful, it is not to say that the 
Postal Service's latest attempts to grow its revenues and volumes by 
offering new services or harnessing technology to enhance services 
offered to the mailing public will not succeed.
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    \39\ PRC Op. MC78-3, December 17, 1979, at 22-24.
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    With the proliferation of these services, the Commission finds it 
appropriate to propose to codify in its rules the term ``postal 
service'' to provide guidance to the Postal Service and the public 
concerning services that fall within the ambit of sections 3622 and 
3623 of the Act. The proposed rule imposes no restrictions on the types 
of postal service that the Postal Service may wish to offer. Such 
services, however, must be reasonably related to the functions 
customarily performed by the national post.
    In pleadings before the Commission, the Postal Service has asserted 
that it is authorized to provide commercial nonpostal services.\40\ The 
Commission takes no position on this claim, other than to reiterate 
that the lawfulness of the Postal Service's actions in implementing a 
nonpostal service is not an issue before the Commission.\41\ While the 
Commission has formed no opinion about whether any of the services 
identified in Consumer Action's petition are postal or nonpostal, it 
would appear, based on little more than a review of the

[[Page 3291]]

pleadings in that proceeding, that the claim that each service is 
nonpostal may be somewhat strained. The converse would appear to be 
equally true; not each service would appear to be postal.
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    \40\ See Comments of United States Postal Service on Consumer 
Action Petition, January 30, 2003, at 14-17.
    \41\ See PRC Order No. 1239.
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    New services offered by the Postal Service are not without public 
interest considerations.\42\ The proposed rule provides a framework in 
which they may be considered. The need for Commission review, with an 
opportunity for public participation, is heightened because of the 
possibility (or even the likelihood) that new postal services may 
operate in competition with private sector services. The proceedings 
discussed above give ample evidence of this. Concerns about the effects 
on competition were at the heart of the two complaint proceedings, 
Docket Nos. C96-1 and C99-1. Similarly, in response to Consumer 
Action's petition, various commenters question the Postal Service's 
role in providing services in markets that are also served by the 
private sector.\43\ The need to consider the competitive and financial 
implications of new Postal Service products provides compelling support 
for Commission review under section 3623 of the Act and is thoroughly 
consistent with the statutory scheme.\44\
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    \42\ The Commission's Rules offer various alternatives for 
expedited consideration of proposed classification changes.
    \43\ See, e.g., Comments of Pitney Bowes, Inc., Petition for 
Review of Unclassified Services, April 18, 2003; Comments of the 
Computer & Communications Industry Association on the Motion of the 
Office of the Consumer Advocate to Request that the Commission 
Institute a Proceeding to Consider the Postal/Nonpostal Character of 
Specified Services and the Establishment of Rules to Require a Full 
Accounting of the Costs and Revenues of Nonpostal Services, Petition 
for Review of Unclassified Services, January 28, 2003.
    \44\ Nothing in the proposed rule is intended to suggest that 
the Commission has or intends to assert jurisdiction over any 
``nonpostal'' service. One might legitimately question the need for 
such service where offered in competition with the private sector. 
While that might also be said of competitive postal services, 
statutory considerations might may well dictate a different result.
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    The Commission has the primary responsibility for interpreting 
whether services offered or proposed by the Postal Service are subject 
to chapter 36 of the Act.\45\ In exercising its rate and classification 
authority, the Commission is required to carefully balance the 
competing interests of those affected by the Postal Service's actions, 
e.g., assessing the effects of the Postal Service's proposals or 
services on the public, including both users and competitors. Courts 
have explained that the Commission's involvement:
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    \45\ See United Parcel Service v. United States Postal Service, 
604 F.2d 1370, 1381 (3rd Cir. 1979), cert. denied, 446 U.S. 957 
(1980).

insures that an agency independent of the Postal Service will 
provide for public notice and hearing--input of those affected by 
the proposed action--in full and on the record, see 39 U.S.C. Sec.  
3624(a), consideration of pertinent factors and congressionally 
imposed goals before certain types of decisions are made. \46\
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    \46\ United Parcel Service v. United States Postal Service, 455 
F.Supp. 857, 869 (E.D. PA 1978), aff'd, 604 F.2d 1370 (3d Cir. 
1979), cert. denied, 446 U.S. 957 (1980).

The Court underscored the importance of the Commission's role by 
further noting that it was designed, among other things, ``to assure 
that the public is heard from and the public interest represented 
before rate, classification, and significant service changes are 
made.'' \47\
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    \47\ Ibid.
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3. Proposed Rule

    The Commission proposes to amend its rules by inserting the 
following definition into new subsection (r) of rule 5, 39 CFR 3001.5, 
as follows: ``postal service means the delivery of letters, printed 
matter, or packages weighing up to 70 pounds, including acceptance, 
collection, processing, transmission, or other services supportive or 
ancillary thereto.'' A proposed amendment to the Code of Federal 
Regulations reflecting the addition of a definition of the term 
``postal service'' to the Commission's rules of practice appears 
following the Secretary's signature.
    The intent of the proposed rule is to afford the Postal Service 
sufficient flexibility to engage in functions ordinarily performed by a 
national post as may be affected, from time-to-time, by changes in 
technology. The principal standard that has been applied in analyzing 
different services is ``the relationship of the service to the carriage 
of mail. Those which can fairly be said to be ancillary to the 
collection, transmission, or delivery of mail are postal services 
within the meaning of Sec.  3622.'' \48\ Thus, the proposed definition 
is intended not to represent a change, but to clarify the definition to 
all interested persons.
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    \48\ PRC Order No. 1128, July 30, 1996, at 10.
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    Taking technological changes into account is consistent with the 
Act. Section 101(a) directs the Postal Service to ``provide prompt, 
reliable, and efficient services to patrons in all areas and shall 
render postal services to all communities.'' \49\ To that end, it is 
charged with ``promot[ing] modern and efficient operations.'' \50\ As 
the Commission has previously observed, ``the fact that a given service 
accomplishes one or more functional components of `the carriage of 
mail' by means that do not involve a physical object does not 
necessarily support a conclusion that the service is `non-postal.' '' 
\51\ As corroboration, the Commission cited filings by the Postal 
Service in Docket Nos. MC78-3, E-COM, and MC98-1, Mailing Online.\52\ 
Notably, with respect to the former, the Postal Service maintained that 
``E-COM messages, while in electronic form, are * * * `in the mails.' 
'' \53\ Regarding Mailing Online service, a Postal Service witness 
characterized the bits of electronic data that would ultimately be 
reduced to hard copy messages ``as mail pieces.'' \54\ Moreover, there 
are other contemporaneous indications that the Postal Service 
considered electronic service offerings as an extension of traditional 
mail services.\55\
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    \49\ See also 39 U.S.C. Sec.  403(a) (``The Postal Service shall 
plan, develop, promote, and provide adequate and efficient postal 
services * * *.''); and 39 U.S.C. Sec.  403(b)(2) (``provide types 
of mail service to meet the needs of different categories of mail 
and mail users.'')
    \50\ 39 U.S.C. Sec.  2010.
    \51\ PRC Order No. 1239, May 3, 1999, at 19.
    \52\ Ibid.
    \53\ PRC Op. MC78-3, December 17, 1979, at 172 (footnote 
omitted).
    \54\ Docket No. MC98-1, Tr. 7/1718.
    \55\ See 61 FR 42,219 (1996) (Electronic services ``will provide 
security and integrity to electronic correspondence and 
transactions, giving them attributes usually associated with First-
Class Mail.'') See also General Accounting Office Report on New 
Postal Products, GAO/GGD-99-15 (November 24, 1998) at 36-37 (The 
Postal Service ``views its entry into the electronic commerce market 
as an extension of its core business--the delivery of traditional 
mail. According to service officials, electronic mail has the same 
attributes as traditional mail * * *.'') Id. at 36.
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    Finally, while it takes no position on any service identified in 
Consumer Action's petition, the Commission notes that certain services 
are offered through the Postal Service's Web site and are described 
there as mail or its functional equivalent. For example, regarding 
NetPost services, users are encouraged to ``[d]iscover the many types 
of mail and many creative ways you can send mail online and have it 
delivered to their mailbox.'' \56\ ``Prepare and send hardcopy mail 
from the convenience of your computer.'' \57\ As an inducement, there 
are ``[p]ostage discounts with every mailing of any size.'' \58\ 
Similarly, users are encouraged to use the USPS Electronic Postmark 
(EPM), which

[[Page 3292]]

employs an auditable time stamp, because: \59\
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    \56\ U.S. Postal Service Create and Send Mail Online page 
<http://www.usps.com/send/waystosendmailandpackages/createandsendmailonline.htm.
    \57\ U.S. Postal Service NetPost Mailing Online page <http://www.usps.com/mailingonline/welcome.htm.
    \58\ Ibid.
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    [sbull] ``Correspondence handled by USPS subject to confidentiality 
statutes and regulations.''
    [sbull] ``Neutral third party with universal public service 
mandate.''
    [sbull] ``Federally imposed regulations on USPS employees-- 
enhancing customer confidence.''
    [sbull] ``History of providing postmarks with legal significance.''
    [sbull] ``Long-lived statutory purpose `to bind the nation together 
through the * * * correspondence of the people.' 39 U.S.C. 101.''
    In the same vein, the Universal Postal Union recently indicated 
that it ``is working with * * * progressive postal services to promote 
an electronic postmark that would facilitate electronic transactions 
and guarantee their security * * *.'' \60\ The electronic postmark is 
described as the ``digital equivalent of the * * * indicia that appears 
on every stamped envelope today and has legally binding implications in 
matters of mail tampering.'' \61\
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    \59\ U.S. Postal Service Benefits of EPM page <http://www.usps.com/electronicpostmark/benefits.htm.
    \60\ UPU Press Release, Electronic Postmark Aims to Build 
Confidence, Trust and Security for Global E-Trade and E-Business, 
Bern, Switzerland, 10 December 2003 <http://www.upu.int/presse/eu/electronic_postmark_aims_to_build_confidence_en.pdf.
    \61\ Ibid.
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4. Procedural Matters
    Comments. By this order, the Commission hereby gives notice that 
comments from interested persons concerning the proposed amendment to 
the Commission's rules are due on or before March 1, 2004. Reply 
comments may also be filed and are due April 1, 2004.
    Representation of the general public. In conformance with Sec.  
3624(a) of title 39, the Commission designates Shelley S. Dreifuss, 
Director of the Commission's Office of the Consumer Advocate, to 
represent the interests of the general public in this proceeding. 
Pursuant to this designation, Ms. Dreifuss will direct the activities 
of Commission personnel assigned to assist her and, upon request, will 
supply their names for the record. Neither Ms. Dreifuss nor any of the 
assigned personnel will participate in or provide advice on any 
Commission decision in this proceeding.
    It is ordered:
    1. Interested persons may submit initial comments by no later than 
March 1, 2004. Reply comments may also be filed and are due no later 
than April 1, 2004.
    2. Shelley S. Dreifuss, director of the Office of the Consumer 
Advocate, is designated to represent the interests of the general 
public.
    3. The Secretary shall arrange for publication of this proposed 
rulemaking in the Federal Register.

List of Subjects in 39 CFR Part 3001

    Administrative practice and procedure, Postal Service.


    Issued: January 16, 2004.
    By the Commission.

Steven W. Williams,
Secretary.
    For the reasons discussed above, the Commission proposes to amend 
39 CFR part 3001 as follows:

PART 3001--RULES OF PRACTICE AND PROCEDURE

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

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

Subpart A--Rules of General Applicability

    2. Amend Sec.  3001.5 by adding new paragraph (r) to read as 
follows:


Sec.  3001.5  Definitions.

* * * * *
    (r) Postal service means the delivery of letters, printed matter, 
or packages weighing up to 70 pounds, including acceptance, collection, 
processing, transmission, or other services supportive or ancillary 
thereto.

[FR Doc. 04-1389 Filed 1-22-04; 8:45 am]
BILLING CODE 7710-FW-P