[Federal Register Volume 70, Number 53 (Monday, March 21, 2005)]
[Notices]
[Pages 13551-13552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-5504]


=======================================================================
-----------------------------------------------------------------------

POSTAL RATE COMMISSION

[Docket No. MC2004-3; Order No. 1433]


Negotiated Service Agreement

AGENCY: Postal Rate Commission.

ACTION: Notice and order concerning reconsideration and establishing 
procedures.

-----------------------------------------------------------------------

SUMMARY: This document informs the public that at the request of the 
United States Postal Service Governors, the Commission will reconsider 
its opinion and recommended decision approving a negotiated service 
agreement in docket number MC2004-3. The Postal Service has been 
allowed until April 15, 2005, to submit arguments in favor of 
reconsideration. The dates for further procedural steps will be 
determined after the Postal Service submission has been reviewed.

DATES: The Postal Service's memorandum and proposal is due April 15, 
2005.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, general counsel, 
at 202-789-6818.

SUPPLEMENTARY INFORMATION:

Procedural History

    Negotiated Service Agreement Proposed Rule, 68 FR 52546 (September 
4, 2003).
    Negotiated Service Agreement Final Rule, 69 FR 7574 (September 4, 
2003).
    Rate and Service Changes To Implement Functionally Equivalent 
Negotiated Service Agreement, 69 FR 39520 (June 25, 2004).
    On December 17, 2004, the Commission issued its Opinion and 
Recommended Decision Approving Negotiated Service Agreement in Docket 
No. MC2004-3 (Bank One Negotiated Service Agreement). On March 7, 2005, 
the Postal Service informed the Commission of the Governors' direction 
\1\ for the Postal Service to initiate proceedings on reconsideration 
consistent with the Governors' decision.\2\ The Postal Service also 
proposed procedures and requested leave to file a memorandum on 
reconsideration.
---------------------------------------------------------------------------

    \1\ Decision of the Governors of the United States Postal 
Service on the Opinion and Recommended Decision of the Postal Rate 
Commission Approving Negotiated Service Agreement with Bank One 
Corporation, Docket No. MC2004-3, February 16, 2005 (Governors' 
decision).
    \2\ United States Postal Service Motion for Leave to File 
Memorandum on Reconsideration and for Proposed Procedures, March 7, 
2005.
---------------------------------------------------------------------------

    In the Governors' decision, the Governors conclude that the changes 
recommended by the Commission to give effect to the negotiated service 
agreement warrant implementation. However, the Governors disagree with 
the Commission's determination to place an overall limit on the 
discounts available to Bank One during the course of the agreement. The 
Governors ask the Commission to reconsider the recommendation of an 
overall limit (stop-loss cap) in light of the Governors' views and 
based on the existing record. The Governors do not ask the Commission 
to reopen the record to receive additional testimony, but do expect 
that the Commission will solicit comments from participants in this 
matter.
    If the Commission again recommends that the negotiated service 
agreement includes a stop-loss cap, the Governors request that the 
Commission clarify and explain further the comments in its Opinion and 
Recommended Decision, and in its separate Concurring Opinion, regarding 
the potential for uncapped negotiated service agreements that are 
functionally equivalent to the agreement with Capital One Services, 
Inc. approved in Docket No. MC2002-2.
    The Governors also request that the Commission elaborate on the 
type and level of proof that the Commission might find persuasive in 
avoiding stop-loss caps in future baseline negotiated service agreement 
cases.
    Finally, the Governors ask the Commission to discuss the role of 
settlement in uncontested cases involving functionally equivalent 
negotiated service agreements.
    The Postal Service has proposed procedures to facilitate the 
Commission's reconsideration of its recommendations. The Postal Service 
proposes to present its views on the questions raised by the Governors 
in their decision in the form of a memorandum addressing the pertinent 
legal, economic, and practical issues. It also is prepared to propose 
an evidentiary approach that could serve as a standard for future 
negotiated service agreement proposals.
    The Postal Service requests until April 15, 2005, to prepare its 
memorandum. It explains it needs this fairly lengthy period of time to 
prepare its submissions because it is simultaneously involved in 
preparation for the filing of an omnibus rate case. Participants as 
well as prospective negotiated agreement partners would then be allowed 
to comment on the Postal Service's views. The Postal Service suggests 
that the Commission next would address the Postal Service's and other 
participant's comments and proposals, and also would propose an 
approach to overcome its concerns that led to imposing a stop-loss cap 
in this case. Participants then would be allowed to comment on the 
Commission's views. Finally, the Commission would issue a further 
recommended decision including further explanations and guidance for 
future cases.
    The Commission understands the need to promptly respond to the 
issues raised by the Governors upon reconsideration. Nonetheless, the 
Commission assumes that the Governors are aware of the multiple 
obligations of the Postal Service legal staff, and that if an omnibus 
rate case is filed this will impose heavy time pressure on

[[Page 13552]]

participants most likely to seek to present thoughtful suggestions on 
negotiated service agreement policies to the Commission.
    As a first step, the Commission grants the Postal Service's motion 
to file a memorandum addressing the pertinent legal, economic, and 
practical issues in regard to the questions raised by the Governors in 
their decision. The Postal Service also may include a proposal for an 
evidentiary approach that could serve as a standard for future 
negotiated service agreement proposals. The Postal Service shall file 
this material by April 15, 2005.
    As the Postal Service must accommodate the time pressures involved 
with preparing for an omnibus rate case, participants in this 
proceeding for reconsideration also will face time pressures once the 
omnibus rate case is filed. For this reason, until the scope of the 
Postal Service comments and proposals can be evaluated it is premature 
to map out a procedural schedule for issuing an Opinion and Further 
Recommended Decision in this case.
    The Commission will review and evaluate the scope and potential 
impact of the initial material submitted by the Postal Service before 
determining an appropriate procedural path to bring this docket to a 
conclusion, with due consideration to the scheduling difficulties all 
parties and the Commission face when an omnibus rate case is pending. 
After the Commission determines an appropriate procedural path, a 
procedural schedule will be established.
    This notice and order initiates the reconsideration of the 
Commission's Opinion and Recommended Decision Approving Negotiated 
Service Agreement in Docket No. MC2004-3. The Secretary shall arrange 
for its publication in the Federal Register.

Ordering Paragraphs

    It is ordered:
    1. The Commission will reconsider its Opinion and Recommended 
Decision Approving Negotiated Service Agreement in Docket No. MC2004-3 
and issue a further recommended decision.
    2. United States Postal Service Motion for Leave to File Memorandum 
on Reconsideration and for Proposed Procedures, March 7, 2005, is 
granted consistent with the text of this order. The Postal Service 
shall file its memorandum and proposal by April 15, 2005.
    3. The Secretary shall arrange for publication of this notice and 
order in the Federal Register.

    Issued: March 16, 2005.

    By the Commission.
Steven W. Williams,
Secretary.
[FR Doc. 05-5504 Filed 3-18-05; 8:45 am]
BILLING CODE 7710-FW-P