[Federal Register Volume 71, Number 221 (Thursday, November 16, 2006)]
[Rules and Regulations]
[Pages 66675-66679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-19289]


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

POSTAL RATE COMMISSION

39 CFR Part 3001

[Docket No. RM2006-1; Order No. 1481]


Rate and Classification Requests

AGENCY: Postal Rate Commission.

ACTION: Final rule.

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

SUMMARY: The Commission is re-issuing five sets of rules related to 
certain types of Postal Service requests that are due to expire, given 
sunset provisions. Re-issuance entails eliminating sunset

[[Page 66676]]

provisions in four sets. It also entails limited revisions, such as 
shortening and standardizing intervention periods, revising the 
numbering of one set, and minor editorial changes. Re-issuance allows 
the Postal Service to have continued flexibility, without interruption, 
and will enhance administrative efficiency.

DATES: These sets of rules are effective November 16, 2006.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov.

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

SUPPLEMENTARY INFORMATION: Regulatory History 71 FR 55136 (September 
21, 2006).
    54 FR 11394 (March 20, 1989).
    54 FR 33681 (August 16, 1989).
    60 FR 54981 (October 27, 1995).
    61 FR 24447 (May 15, 1996).
    66 FR 54436 (October 29, 2001).

    In Order No. 1479, the Commission proposed to amend its Rules of 
Practice and Procedure, 39 CFR 3001.1 et seq., with respect to five 
sets of rules that are subject to five-year sunset provisions, each of 
which is scheduled to expire November 28, 2006.\1\ Generally, these 
rules provide for expedited consideration of various Postal Service 
requests for a recommended decision. The five sets of rules include: 
\2\
---------------------------------------------------------------------------

    \1\ PRC Order No. 1479, Docket No. RM2006-1, September 15, 2006.
    \2\ The Rules of Practice and Procedure may be accessed on the 
Commission's Web site, www.prc.gov, by clicking first on 
``Contents'' and then on ``Commission Rules'' which are found under 
the heading ``Table of Contents.''
---------------------------------------------------------------------------

    (1) 39 CFR 3001.57-60, market response Express Mail rate requests;
    (2) 39 CFR 3001.69-69c, minor classification changes;
    (3) 39 CFR 3001.161-166, market tests of proposed classification 
changes;
    (4) 39 CFR 3001.171-176, provisional service changes of limited 
duration; and
    (5) 39 CFR 3001.181-182, multi-year test periods for proposed new 
services.
    Exclusive of minor, non-substantive editorial changes, the 
Commission proposed to amend its rules in two principal ways, while 
reserving judgment on the rules concerning market response Express Mail 
rates. First, it proposed to re-issue rules 69-69c, 161-166, 171-176, 
and 181-182, amended to eliminate the sunset provision.\3\ Second, the 
Commission proposed to standardize and shorten the time period for 
interventions as of right in proceedings involving minor classification 
changes (rules 69-69c), market tests (rules 161-166), and provisional 
service changes (rules 171-176). The Commission did not propose to re-
issue rules 57-60 (market response Express Mail rates), but rather 
sought comments on whether their re-issuance would be in the public 
interest.
---------------------------------------------------------------------------

    \3\ Under the proposal, the rules for minor classification 
changes (Sec. Sec.  3001.69-69c) are renumbered as Sec.  3001.69(a)-
(f) to conform to Office of the Federal Register style preference.
---------------------------------------------------------------------------

    Interested persons were invited to comment on the proposed 
rulemaking. The Postal Service and the Office of the Consumer Advocate 
(OCA) submitted initial comments; \4\ the Postal Service also filed 
reply comments.\5\
---------------------------------------------------------------------------

    \4\ Initial Comments of the United States Postal Service in 
Response to Order No. 1479, October 13, 2006, (Postal Service 
Initial Comments); Office of the Consumer Advocate Comments in 
Response to Order No. 1479, October 13, 2006 (OCA Comments).
    \5\ Reply Comments of the United States Postal Service, October 
20, 2006 (Postal Service Reply Comments).
---------------------------------------------------------------------------

I. Parties' Comments

    The sole controversy raised by the comments is whether rules 57-60 
should be re-issued or allowed to lapse. The Postal Service argues for 
re-issuance, while the OCA advocates allowing these rules to lapse 
unless the Postal Service justifies their retention and indicates ``a 
concrete intention to use them in the future[.]'' \6\ Otherwise, the 
commenters agree, for all intents and purposes, that the proposed 
amendments should be adopted.\7\
---------------------------------------------------------------------------

    \6\ OCA Comments at 1.
    \7\ OCA does not take a position on the proposed shortening of 
the intervention period because it is not required to intervene in 
Commission proceeding, but rather is appointed pursuant to 39 U.S.C. 
3624(a). Id. at 2.
---------------------------------------------------------------------------

    In Order No. 1479, the Commission discussed the substance and 
history of each of the rules. Among other things, it noted that the 
market response Express Mail rules, which were enacted in 1989, had 
never been invoked by the Postal Service. In light of this, the 
Commission questioned whether these rules had any continuing utility, 
suggesting that ``[a]bsent an affirmative showing, there may be no 
compelling reason to reissue these rules.'' \8\
---------------------------------------------------------------------------

    \8\ PRC Order No. 1479, supra, at 8.
---------------------------------------------------------------------------

    The Postal Service urges the Commission to re-issue rules 57-60 for 
an additional five years.\9\ It contends that, notwithstanding their 
lack of use, these rules retain a continuing value providing a 
``defined procedural mechanism'' to enable the Postal Service to 
respond to changes in the overnight delivery market more quickly than 
may otherwise be possible. Id. at 4. The Postal Service further asserts 
that re-issuing the rules would not impose a burden on the Commission 
or any interested party. Id. at 5.
---------------------------------------------------------------------------

    \9\ Postal Service Initial Comments at 3.
---------------------------------------------------------------------------

    The OCA's opposition to rules 57-60 is conditional.\10\ It would 
have them lapse unless the Postal Service justifies their retention and 
explicitly commits to employ them in the future. Absent that, OCA 
suggests that discontinuing the rules may serve ``administrative 
efficiency.'' Id. at 2.
---------------------------------------------------------------------------

    \10\ OCA Comments at 1-2.
---------------------------------------------------------------------------

    In its reply, the Postal Service comments on the OCA's conditional 
opposition. It asserts that its initial comments provide explicit 
justification supporting retention of rules 57-60.\11\ The Postal 
Service argues that OCA's second condition, that it commit to using the 
rules, is impractical because, by their nature, the rules are designed 
to permit the Postal Service to respond to market developments that it 
can neither predict nor control. Id. at 3. Finally, the Postal Service 
counters the OCA's suggestion that discontinuing the rules may serve 
administrative efficiency, arguing that retaining the rules provides 
definitive procedures governing limited Express Mail rate requests 
which are preferable to ad hoc determinations which would otherwise be 
required to achieve expedition. Id. at 4-5.
---------------------------------------------------------------------------

    \11\ Postal Service Reply Comments at 2-3.
---------------------------------------------------------------------------

II. Commission Analysis

    The proposal to re-issue the rules regarding minor classification 
changes (redesignated as rule 69(a)-(f), market tests (rules 161-166) 
provisional service changes (rules 171-176), and multi-year test 
periods (rules 181-182) on a permanent basis, i.e., by eliminating the 
sunset provisions, is unopposed. These provisions, which provide 
procedural options to facilitate expedited consideration of certain 
Postal Service requests, have proven to be useful.\12\ Accordingly, the 
Commission adopts the proposal to re-issue these rules, amended to 
eliminate the sunset provisions.
---------------------------------------------------------------------------

    \12\ See PRC Order No. 1479 at 3-6. Although the Postal Service 
has yet to invoke rules 181-182, the Commission finds that re-
issuance, as amended, is appropriate. The rules, which simply 
prescribe the documentation necessary to support such a request, 
provide a framework for considering potential new services. 
Retention of these rules disadvantages no potentially interested 
person, while affording the Postal Service increased flexibility 
regarding new services.
---------------------------------------------------------------------------

    Likewise the Commission's proposal to standardize and shorten the 
intervention period as of right in proceedings involving minor 
classification changes, market tests, and provisional service changes 
is uncontroversial. Under the current

[[Page 66677]]

rules, interventions are due 26 or 28 days after filing of the Postal 
Service's request.\13\ These provisions predate the Commission's 
adoption of electronic filing requirements. As the Commission noted, 
the proposed change should present no hardship to any prospective 
intervenor given the ready online availability of the Postal Service's 
request, the Commission's order noticing the request, and the ease of 
intervening electronically.\14\ The Postal Service supports this 
proposal.\15\ No party contests it. Accordingly, the Commission adopts 
the proposal to standardize and shorten the intervention period in the 
relevant proceedings.\16\
---------------------------------------------------------------------------

    \13\ See current rules 69b(e), 163(b), and 173(b); see also 
proposed rules 69(e)(4), 163(e), and 173(e).
    \14\ PRC Order No. 1479 at 8.
    \15\ The Postal Service suggests that rules 163(d) and 173(d) be 
revised to make them consistent with revised rule 69b(d), 
redesignated as rule 69(e)(3), which eliminated the requirement that 
the Postal Service's notice accompanying its request for a minor 
classification change ``identify the last day for filing a notice of 
intervention with the Commission.'' Postal Service Initial Comments 
at 2-3. The Postal Service's suggestion is well-taken. The failure 
to revise rules 163(d) and 173(d) to reflect the proposal was an 
oversight. Under the proposal, the Commission's notice of proceeding 
will afford all interested persons a minimum of 15 days after the 
filing of the Postal Service's request within which to intervene. 
See attached rules 69(e)(4), 163(e), and 173(e). The current rules 
require the Postal Service's notice of its filing to identify the 
last day for filing a notice of intervention with the Commission. 
See current rules 69b(d), 163(d), and 173(d). This requirement is 
unnecessary under the proposal. Accordingly, the Postal Service 
suggestion will be adopted in the final rule. Conforming changes 
will not be made to rules 59(c)(1) and (c)(3) at this time because 
rules 57-60 are substantively different from the rules applicable to 
limited classification changes and would require revisions to other 
rules as well.
    \16\ See attached rules 69(e)(4), 163(e), and 173(e).
---------------------------------------------------------------------------

    The Commission did not propose not to re-issue rules 57-60. 
Instead, it simply did not propose to re-issue those rules, urging any 
party favoring them to demonstrate that renewal is appropriate. The 
Postal Service has made an adequate showing to support re-issuing the 
rules for another five-year period. In addition, it satisfactorily 
addressed OCA's conditional opposition, demonstrating the problematic 
nature of requiring an explicit commitment to employ the rules.\17\
---------------------------------------------------------------------------

    \17\ To avoid the possibility that the current rules may lapse, 
the Commission finds it in the public interest to issue this order 
as a final rule to become effective upon publication in the Federal 
Register. This approach also provides the Postal Service with 
maximum operating flexibility under the circumstances.
---------------------------------------------------------------------------

    Two additional factors influence the Commission's decision to re-
issue these rules for an additional five-year period. First, the rules 
provide procedures governing requests for an expedited recommended 
decision on limited Express Mail rate proposals. Interested persons may 
intervene in any such proceeding to protect their interests. As with 
all proceedings before the Commission, one initiated under these rules 
would be decided on the merits. Thus, no potentially interested person 
is prejudiced by renewal of the rules.\18\
---------------------------------------------------------------------------

    \18\ The Postal Service may be alluding to this point when it 
states that re-issuing these rules imposes no burden on interested 
stakeholders. Postal Service Reply Comments at 2-3; see also Postal 
Service Initial Comments at 5.
---------------------------------------------------------------------------

    A second consideration is the notable absence of any comments from 
private carriers opposing re-issuance. This void is not meant to 
suggest that such comments would have been dispositive. By the same 
token, the Commission is reluctant to read too much into the lack of 
opposition. Nonetheless, absent indications to the contrary, it would 
seem to imply that, at a minimum, the rules contain adequate safeguards 
to protect the interests of such prospective parties.
    Finally, as a cautionary observation, the Commission notes that, 
although it is, under the circumstances, re-issuing these rules for an 
additional five-year period, this result is not intended to preclude a 
finding, based on the record in a future proceeding, that these rules 
have become obsolete.
    In conclusion, pursuant to the foregoing discussion, the Commission 
hereby amends its Rules of Practice as set forth below.

Ordering Paragraphs

    It is ordered:
    1. The Commission's Rules of Practice are amended as set forth 
below the signature line of this order.
    2. The attached rules are effective upon publication in the Federal 
Register.
    3. The Secretary shall cause this order to be published in the 
Federal Register.

    By the Commission.
Steven W. Williams,
Secretary.

List of Subjects in 39 CFR Part 3001

    Administrative practice and procedure, Postal Service.


0
For the reasons discussed above, the Commission amends 39 CFR part 3001 
as follows:

PART 3001--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 3001 continues to read as follows:

    Authority: 39 U.S.C. 404(b); 3603; 3622-24; 3661, 3662, 3663.


Sec.  3001.57(b)  [Amended]

0
2. Revise Sec.  3001.57(b) to read as follows:

Subpart B--Rules Applicable to Requests for Changes in Rates or 
Fees


Sec.  3001.57  Market response rate requests for express mail service--
purpose and duration of rules.

* * * * *
    (b) This section and Sec. Sec.  3001.58 through 3001.60 remain in 
effect until November 16, 2011.

0
3. Revise Sec.  3001.69 to read as follows:

Subpart C--Rules Applicable to Requests for Establishing or 
Changing the Mail Classification Schedule


Sec.  3001.69  Expedited minor classification cases.

    (a) Applicability. This section applies when the Postal Service 
requests a recommended decision pursuant to section 3623 and seeks 
expedited review on the ground that the requested change in mail 
classification is minor in character. The requirements and procedures 
specified in this section apply exclusively to Commission consideration 
of requested mail classification changes which the Postal Service 
denominates as, and the Commission finds to be, minor in character.
    (b) Considerations. A requested classification change may be 
considered minor in character if it:
    (1) Would not involve a change in any existing rate or fee;
    (2) Would not impose any restriction in addition to pre-existing 
conditions of eligibility for the entry of mail in an existing subclass 
or category of service or for an existing rate element or worksharing 
discount; and
    (3) Would not significantly increase or decrease the estimated 
institutional cost contribution of the affected subclass or category of 
service.
    (c) Filing of formal request and prepared direct evidence. Whenever 
the Postal Service determines to file a request under this section, it 
shall file a request for a change in mail classification pursuant to 
Sec.  3623 that comports with the requirements of this section and of 
Subpart C of the rules of practice. Each such formal request shall 
include the following information:
    (1) A description of the proposed classification change or changes, 
including proposed changes in the text of the Domestic Mail 
Classification Schedule and any pertinent rate schedules;
    (2) A thorough explanation of the grounds on which the Postal 
Service

[[Page 66678]]

submits that the requested change in mail classification is minor in 
character; and
    (3) An estimate, prepared in the greatest level of detail 
practicable, of the overall impact of the requested change in mail 
classification on postal costs and revenues, mail users and competitors 
of the Postal Service.
    (d) Data and information filing requirements. Formal requests 
generally require the submission of the data and information specified 
in Sec.  3001.64.
    (1) If the Postal Service believes that data required to be filed 
under Sec.  3001.64 are unavailable, it shall explain their 
unavailability as required by Sec.  3001.64(a)(2)(i), (ii), and (iv).
    (2) If the Postal Service believes that data or other information 
required to be filed under Sec.  3001.64 should not be required in 
light of the minor character of the requested change in mail 
classification, it shall move for a waiver of that requirement. The 
motion shall state with particularity the reasons why the character of 
the request and its circumstances justify a waiver of the requirement.
    (3) A satisfactory explanation of the unavailability of information 
required under Sec.  3001.64 or of why it should not be required to 
support a particular request will constitute grounds for excluding from 
the proceeding a contention that the absence of the information should 
form a basis for rejection of the request, unless the party desiring to 
make such a contention:
    (i) Demonstrates that, considering all the facts and circumstances 
of the case, it was clearly unreasonable for the Postal Service to 
propose the change in question without having first secured the 
information and submitted it in accordance with Sec.  3001.64; or
    (ii) Demonstrates other compelling and exceptional circumstances 
requiring that the absence of the information in question be treated as 
bearing on the merits of the proposal.
    (e) Expedited procedural schedule. The Commission will treat 
requests under this section as subject to the maximum expedition 
consistent with procedural fairness.
    (1) Persons who are interested in participating in proceedings 
initiated under this section may intervene pursuant to Subpart A of the 
rules of practice. Parties may withdraw from a proceeding by filing a 
notice with the Secretary of the Commission.
    (2) When the Postal Service files a request under this section, it 
shall comply with the Filing Online procedures of Sec. Sec.  3001.9 
through 3001.12.
    (3) When the Postal Service files a request under this section, it 
shall on that same day file a notice that briefly describes its 
proposal. This notice shall indicate on its first page that it is a 
notice of a request for a minor change in mail classification to be 
considered under this section.
    (4) Within 5 days after receipt of a Postal Service request 
invoking Sec.  3001.69, the Commission shall issue a notice of 
proceeding and provide for intervention by interested persons pursuant 
to Subpart A of the rules of practice. The notice of proceeding shall 
state that the Postal Service has denominated the mail classification 
change as a minor change, and has requested expedited consideration 
pursuant to Sec.  3001.69. The notice shall further state the grounds 
on which the Postal Service submits that the requested change in mail 
classification is minor in character and shall afford all interested 
persons a minimum of 15 days after filing of the Postal Service's 
request within which to intervene, submit responses to the Postal 
Service's request for consideration of its proposed mail classification 
change under Sec.  3001.69, and request a hearing.
    (5) Within 28 days after publication of the notice of proceeding 
pursuant to paragraph (e)(4) of this section, the Commission shall 
decide whether to consider the request under this section and shall 
issue an order incorporating that ruling. The Commission shall order a 
request to be considered under this section if it finds:
    (i) The requested classification change is minor in character; and
    (ii) The effects of the requested change are likely to be 
appropriately limited in scope and overall impact.
    (6) If the Commission determines that a Postal Service request is 
appropriate for consideration under this section, those respondents who 
request a hearing shall be directed to state with specificity within 14 
days after publication of that determination the issues of material 
fact that require a hearing for resolution. Respondents shall also 
identify the fact or facts set forth in the Postal Service's filing 
that the party disputes, and when possible, what the party believes to 
be the fact or facts and the evidence it intends to provide in support 
of its position.
    (7) The Commission will hold hearings on a Postal Service request 
considered under this section when it determines that there are genuine 
issues of material fact to be resolved and that a hearing is needed to 
resolve those issues. Hearings on a Postal Service request will 
commence within 21 days after issuance of the Commission determination 
pursuant to paragraph (e)(5) of this section. Testimony responsive to 
the Postal Service's request will be due 14 days after the conclusion 
of hearings on the Postal Service request.
    (8) If the Commission determines that a request of the Postal 
Service is not appropriate for consideration under this section, the 
request will be considered in accordance with appropriate provisions of 
the Commission's rules.
    (f) Time limits. The schedule involving a request under this 
section will allow for issuance of a recommended decision:
    (1) Not more than 90 days after the filing of a Postal Service 
request if no hearing is held; and
    (2) Not more than 120 days after the filing of a request if a 
hearing is scheduled.


Sec.  3001.69a  [Removed]

0
4. Remove Sec.  3001.69a.


Sec.  3001.69b  [Removed]

0
5. Remove Sec.  3001.69b.


Sec.  3001.69c  [Removed]

0
6. Remove Sec.  3001.69c.


Sec.  3001.161  [Amended]

0
7. In Sec.  3001.161, remove paragraph (b) and remove the designation 
of paragraph (a).


Sec.  3001.163  [Amended]

0
8. In Sec.  3001.163, revise paragraphs (b), (d), and (e) to read as 
follows:


Sec.  3001.163  Procedures--expedition of public notice and procedural 
schedule.

* * * * *
    (b) Persons who are interested in participating in proceedings to 
consider Postal Service requests to conduct a market test may intervene 
pursuant to Subpart A of the rules of practice. Parties may withdraw 
from a particular case by filing a notice with the Secretary of the 
Commission.
* * * * *
    (d) When the Postal Service files a request under the provisions of 
this subpart, it shall on that same day file a notice that briefly 
describes its proposal. This notice shall indicate on its first page 
that it is a notice of a Market Test Request to be considered under 
Sec. Sec.  3001.161 through 3001.166.
    (e) Within 5 days after receipt of a Postal Service request under 
the provisions of this subpart, the Commission shall issue a notice of 
proceeding and provide interested persons a minimum of 15 days after 
filing of the Postal Service request within which to intervene. In the 
event

[[Page 66679]]

that a party wishes to dispute a genuine issue of material fact to be 
resolved in the consideration of the Postal Service's request, that 
party shall file with the Commission a request for a hearing within the 
time allowed in the notice of proceeding. The request for a hearing 
shall state with specificity the fact or facts set forth in the Postal 
Service's filing that the party disputes, and when possible, what the 
party believes to be the fact or facts and the evidence it intends to 
provide in support of its position. The Commission will hold hearings 
on a Postal Service request made pursuant to this subpart when it 
determines that there is a genuine issue of material fact to be 
resolved, and that a hearing is needed to resolve that issue.


Sec.  3001.171  [Amended]

0
9. In Sec.  3001.171, remove paragraph (b) and remove the designation 
for paragraph (a).


Sec.  3001.173  [Amended]

0
10. In Sec.  3001.173, revise paragraphs (b), (d), and (e) to read as 
follows:


Sec.  3001.173  Procedures--expedition of public notice and procedural 
schedule.

* * * * *
    (b) Persons who are interested in participating in a proceeding to 
consider Postal Service requests to establish a provisional service may 
intervene pursuant to Subpart A of the rules of practice. Parties may 
withdraw from a proceeding by filing a notice with the Secretary of the 
Commission.
* * * * *
    (d) When the Postal Service files a request under the provisions of 
this subpart, it shall on that same day file a notice that briefly 
describes its proposal. Such notice shall indicate on its first page 
that it is a notice of a Request for Establishment of a Provisional 
Service to be considered under Sec. Sec.  3001.171 through 3001.176.
    (e) Within 5 days after receipt of a Postal Service request under 
the provisions of this subpart, the Commission shall issue a notice of 
proceeding and provide interested persons a minimum of 15 days after 
filing of the Postal Service request within which to intervene. In the 
event that a party wishes to dispute a genuine issue of material fact 
to be resolved in the consideration of the Postal Service's request, 
that party shall file with the Commission a request for a hearing 
within the time allowed in the notice of proceeding. The request for a 
hearing shall state with specificity the fact or facts set forth in the 
Postal Service's filing that the party disputes, and when possible, 
what the party believes to be the fact or facts and the evidence it 
intends to provide in support of its position. The Commission will hold 
hearings on a Postal Service request made pursuant to this subpart when 
it determines that there is a genuine issue of material fact to be 
resolved, and that a hearing is needed to resolve that issue.

0
11. Revise Sec.  3001.174 to read as follows:


Sec.  3001.174  Rule for decision.

    The Commission will issue a decision on the Postal Service's 
proposed provisional service in accordance with the policies of the 
Postal Reorganization Act, but will not recommend modification of any 
feature of the proposed service which the Postal Service has identified 
in accordance with Sec.  3001.172(a)(3). The purpose of this subpart is 
to allow for consideration of proposed provisional services within 90 
days, consistent with the procedural due process rights of interested 
persons.


Sec.  3001.181  [Amended]

0
12. In Sec.  3001.181, remove paragraph (b), remove the designation of 
paragraph (a).

 [FR Doc. E6-19289 Filed 11-15-06; 8:45 am]
BILLING CODE 7710-FW-P