[Federal Register Volume 69, Number 194 (Thursday, October 7, 2004)]
[Rules and Regulations]
[Pages 60090-60091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22234]


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POSTAL SERVICE

39 CFR Part 501


Authorization to Manufacture and Distribute Postage Meters

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule amends the regulations that define a postage 
meter and its components and a manufacturer and/or distributor of 
postage meters. The rule also puts forth the responsibilities of any 
authorized person or entity to notify the Postal Service upon a change 
in ownership or control, or bankruptcy or insolvency, and identifies 
factors the Postal Service will consider in acting upon requests for 
changes of approval, ownership, or control of an approved manufacturer 
or distributor.

DATES: This rule is effective on October 7, 2004.

FOR FURTHER INFORMATION CONTACT: Wayne Wilkerson, manager of Postage 
Technology Management, by fax at 703-292-4050.

SUPPLEMENTARY INFORMATION: A proposed rule was published in the Federal 
Register on May 10, 2004, pages 25864-25865, with comments due on or 
before July 9, 2004. Written comments were received from the vendor 
community.
    The Postal Service gave thorough consideration to these comments, 
and incorporated as appropriate with only minor, non-material 
exception. You may review comments received by submitting a request of 
the office of Postage Technology Management at 703-292-3691 or by fax 
at 703-292-4073.
    The final plan follows.

List of Subjects in 39 CFR Part 501

    Administrative practice and procedure, Postal Service.

The Amendment

0
For the reasons set out in this document, the Postal Service is 
amending 39 CFR Part 501 as follows:

PART 501--AUTHORIZATION TO MANUFACTURE AND DISTRIBUTE POSTAGE 
METERS

0
1. The authority citation for Part 501 continues to read as follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 410, 
2601, 2605; Inspector General Act of 1978, as amended (Pub. L. 
95'452, as amended), 5 U.S.C. App. 3.

0
2. Revise Sec.  501.1 to read as follows:


Sec.  501.1  Postage evidencing system/infrastructure authorization.

    (a) Postage evidencing systems produce evidence of prepayment of 
U.S. postage by any method other than postage stamps or permit imprint. 
They include but are not limited to postage meters and PC Postage'' 
systems. The Postal Service considers the infrastructure associated 
with such systems to be essential to the exercise of its specific 
powers to prescribe postage and provide evidence of payment of postage 
under 39 U.S.C. 404(a)(2) and (4).
    (b) Due to the potential for adverse impact upon Postal Service 
revenue, the following activities may not be engaged in by any person 
or concern without prior, written approval of the Postal Service:
    (1) Producing or distributing any postage evidencing system that 
generates U.S. postage.
    (2) Repairing, distributing, refurbishing, remanufacturing, or 
destroying any component of a postage evidencing system that accounts 
for or authorizes the printing of U.S. postage.
    (3) Owning or operating an infrastructure that maintains operating 
data for the production of U.S. postage, or accounts for U.S. postage 
purchased for distribution through a postage evidencing system.
    (4) Owning or operating an infrastructure that maintains operating 
data that is used to facilitate licensing or registration with the 
Postal Service of users of a postage evidencing system.
    (c) Any person or entity seeking authorization to perform any 
activity described in paragraph (b) of this section must submit a 
request to the Postal Service in person or in writing.
    (d) Approval shall be based upon satisfactory evidence of the 
applicant's integrity and financial responsibility, and commitment to 
the security of the postage evidencing system, and a determination that 
disclosure to the applicant of the Postal Service customer, financial, 
or other data of a commercial nature necessary to perform the function 
for which approval is sought would be appropriate and consistent with 
good business practices within the meaning of 39 U.S.C. 410 (c)(2). The 
Postal Service may condition its approval on the agreement to 
undertakings by the applicant that would give the Postal Service 
appropriate assurance of the applicant's ability to meet its 
obligations under this section, including but not limited to the method 
and manner of performing certain financial, security, and servicing 
functions and the need to maintain sufficient financial reserves to 
guarantee

[[Page 60091]]

uninterrupted performance of not less than 3 months of operation.
    (e) Qualification and approval may be based upon conditions agreed 
to by the Postal Service and the applicant. The applicant is approved 
in writing to engage in the function(s) for which authorization was 
sought and approved.

0
3. Revise Sec.  501.3 to read as follows:


Sec.  501.3  Changes in ownership or control, bankruptcy, or 
insolvency.

    (a) Any person or entity authorized under Sec.  501.1 must promptly 
notify the Postal Service when it has a reasonable expectation that 
there may be a change in its ownership or control including changes in 
the ownership of an affiliate which exercises control over its postage 
evidencing system operations in the United States. A change of 
ownership or control within the meaning of this section includes entry 
into a strategic alliance or other agreement whereby the third party 
has access to data related to the security of the system or the third 
party is a competitor to the Postal Service. Any person or entity 
seeking to acquire ownership or control of a person or entity 
authorized under Sec.  501.1 must provide the Postal Service 
satisfactory evidence that it satisfies the conditions for approval 
stated in Sec.  501.1. Early notification of a proposed change in 
ownership or control will facilitate expeditious review of an 
application to acquire ownership or control under this section.
    (b) Any person or entity authorized under Sec.  501.1 must promptly 
notify the Postal Service when it has a reasonable expectation that 
there may be a change in the status of its financial condition either 
through bankruptcy, insolvency, assignment for the benefit of 
creditors, or other similar financial action. Any person or entity 
authorized under Sec.  501.1 who experiences a change in the status of 
its financial condition may, at the discretion of the Postal Service, 
have its authorization under Sec.  501.1 modified or terminated.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 04-22234 Filed 10-6-04; 8:45 am]
BILLING CODE 7710-12-P