[Federal Register Volume 72, Number 158 (Thursday, August 16, 2007)]
[Notices]
[Pages 46110-46111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16089]


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

POSTAL REGULATORY COMMISSION

[Docket No. MC2007-5; Order No. 25]


Negotiated Service Agreement

AGENCY: Postal Regulatory Commission.

ACTION: Notice and order.

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

SUMMARY: This document establishes a docket for consideration of the 
Postal Service's request for approval of contract rates with Life Line 
Screening of America. It identifies key elements of the proposed 
agreement, which involves Standard Mail letter rates, and addresses 
preliminary procedural matters.

DATES: 1. August 31, 2007: Deadline for filing notices of intervention.
    2. September 7, 2007: Deadline for responses to proposal for 
limiting issues.
    3. September 11, 2007: Prehearing conference, 10 a.m.

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 and [email protected].

SUPPLEMENTARY INFORMATION: On August 8, 2007, the United States Postal 
Service filed a request seeking a recommended decision from the Postal 
Regulatory Commission approving a Negotiated Service Agreement (NSA) 
with Life Line Screening of America (Life Line Screening).\1\ The NSA 
is proffered as a new baseline agreement. The Request, which includes 
six attachments, was filed pursuant to chapter 36 of title 39, United 
States Code.\2\
---------------------------------------------------------------------------

    \1\ Request of the United States Postal Service for a 
Recommended Decision on Classifications and Rates to Implement a 
Baseline Negotiated Service Agreement with Life Line Screening, 
August 8, 2007 (Request).
    \2\ Attachments A and B to the Request contain proposed changes 
to the Domestic Mail Classification Schedule and the associated rate 
schedules; Attachment C is a certification required by Commission 
rule 193(i) specifying that the cost statements and supporting data 
submitted by the Postal Service, which purport to reflect the books 
of the Postal Service, accurately set forth the results shown by 
such books; Attachment D is an index of testimony and exhibits; 
Attachment E is a compliance statement addressing satisfaction of 
various filing requirements; and Attachment F is a copy of the 
Negotiated Service Agreement.
---------------------------------------------------------------------------

    The Postal Service has identified Life Line Screening, along with 
itself, as parties to the NSA. This identification serves as notice of 
intervention by Life Line Screening. It also indicates Life Line 
Screening shall be considered a co-proponent, procedurally and 
substantively, of the Postal Service's Request during the Commission's 
review of the NSA. Rule 191(b) [39 CFR 3001.191(b).] An appropriate 
Notice of Life Line Screening of Appearance and Filing of Testimony as 
Co-Proponent, August 8, 2007, also was filed.
    In support of the Request, the Postal Service has filed Direct 
Testimony of Michelle K. Yorgey on Behalf of the United States Postal 
Service, August 8, 2007 (USPS-T-1) and library reference USPS-LR-L-1, 
MC2004-3 Opinion and Further Recommended Decision Analysis for the Life 
Line Screening NSA. Life Line Screening has separately filed Direct 
Testimony of Eric Greenberg on Behalf of Life Line Screening, August 8, 
2007 (LLS-T-1). The Postal Service has reviewed the Life Line Screening 
testimony and, in accordance with rule 192(b) [39 CFR 3001.192(b)], 
states that such testimony may be relied upon in presentation of the 
Postal Service's direct case. USPS-T-1 at 1.
    The Postal Service has filed a proposal for limitation of issues in 
this docket.\3\ The Postal Service asserts that the Life Line Screening 
NSA and the Bookspan NSA contain similar elements. [70 FR 42602.] The 
Postal Service identifies issues that were previously decided in 
Bookspan and key issues that are unique to the instant Request. The 
Postal Service requests an order limiting the scope of discovery to key 
new issues.
---------------------------------------------------------------------------

    \3\ United States Postal Service Proposal for Limitation of 
Issues, August 8, 2007.
---------------------------------------------------------------------------

    The Postal Service's Request, accompanying testimonies of witnesses 
Yorgey (USPS-T-1), and Greenberg (LLS-T-1), and other related material 
are available for inspection at the Commission's docket section during 
regular business hours. They can also be accessed electronically, via 
the Internet, on the Commission's Web site (http://www.prc.gov).

I. Life Line Screening NSA

    The Postal Service proposes to enter into a new baseline three-year 
NSA with Life Line Screening. The agreement offers Life Line Screening 
declining block rates for Standard Mail letters. Life Line Screening 
will be able to use the Standard Mail letters for soliciting potential 
and existing customers for direct-to-consumer preventive health 
screenings. The Postal Service estimates it will benefit by $4.87 
million over the life of the NSA. Request at 5.
    The purpose of the Life Line Screening NSA is to encourage Life 
Line Screening to increase its use of Standard Mail letters for selling 
health care screening services nationwide. Without such incentives, the 
Postal Service contends that Life Line Screening's

[[Page 46111]]

direct mail marketing volumes are expected to decline due to 
sensitivity to direct mail cost increases. Id. at 2.
    The Life Line Screening NSA provides discounts based on a block 
rate structure for Standard Mail letter-size pieces. Life Line 
Screening must reach a volume commitment level, which is set higher 
than the lowest block volume level, before any discounts are payable. 
During the first year of the agreement, discounts may be earned for 
annual volumes above 90 million pieces once a volume commitment of 95 
million pieces has been reached. During the second year of the 
agreement, discounts may be earned for annual volumes above 88 million 
pieces once a volume commitment of 93 million pieces has been reached. 
During the third year of the agreement, discounts also may be earned 
for annual volumes above 88 million pieces once a volume commitment of 
93 million pieces has been reached. Discounts, under the proposed 
declining block rate structure, range from 1 to 3 cents per piece 
during each year of the agreement. See Request, Attachment B.
    The volume commitment levels for the second and third years of the 
agreement are subject to adjustment based on the actual volumes mailed 
in the previous year. If at the end of the first or second years, the 
actual volume is 12 percent or more above the prior year's commitment, 
the following year's commitment will be revised to be the average of 
the prior year's actual volume and the following year's original 
commitment. If at the end of the first or second years, the actual 
volume is 5 percent or more below the prior year's commitment, the 
following year's commitment will be decreased by the percentage 
difference between the prior year's actual volume and the prior year's 
original commitment. See Request, Attachment A.
    As a means to protect the Postal Service's financial interests, the 
Life Line Screening NSA contains additional risk mitigation features. 
The Postal Service has established three tiers within each letter 
volume block. The highest discount tier for the first year of the 
agreement applies to volumes between 110 million and 118 million 
mailpieces. If Life Line Screening exceeds 118 million pieces by an 
additional 10 million pieces, the agreement will be terminated. Either 
party also may unconditionally cancel the agreement with 30 days' 
written notice. Id.

II. Commission Analysis

    Applicability of the rules for baseline NSAs. For administrative 
purposes, the Commission has docketed the instant filing as a request 
for a new baseline NSA pursuant to rule 195 [39 CFR 3001.195].
    Representation of the general public. In conformance with section 
3624(a) of title 39, the Commission designates Kenneth E. Richardson, 
acting 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, Mr. Richardson will direct the activities 
of Commission personnel assigned to assist him and, upon request, will 
supply their names for the record. Neither Mr. Richardson nor any of 
the assigned personnel will participate in or provide advice on any 
Commission decision in this proceeding.
    Intervention. Those wishing to be heard in this matter are directed 
to file a notice of intervention on or before August 31, 2007. The 
notice of intervention shall be filed using the Internet (Filing 
Online) at the Commission's Web site (http://www.prc.gov), unless a 
waiver is obtained for hardcopy filing. Rules 9(a) and 10(a) [39 CFR 
3001.9(a) and 10(a).] Notices should indicate whether participation 
will be on a full or limited basis. See rules 20 and 20a [39 CFR 
3001.20 and 20a.] No decision has been made at this point on whether a 
hearing will be held in this case.
    Prehearing conference. A prehearing conference will be held 
September 11, 2007 at 10 a.m. in the Commission's hearing room. 
Participants intending to object to the Postal Service's proposal for 
limiting issues or intending to identify issue(s) that would indicate 
the need to schedule a hearing shall file a written explanation of 
their position by September 7, 2007. Participants should be prepared to 
discuss these issues during the prehearing conference. The Commission 
intends to issue a ruling on these issues shortly after the prehearing 
conference.

III. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. MC2007-5 to consider the 
Postal Service Request referred to in the body of this order.
    2. The Commission will sit en banc in this proceeding.
    3. Kenneth E. Richardson, acting director of the Commission's 
Office of the Consumer Advocate, is designated to represent the 
interests of the general public.
    4. The deadline for filing notices of intervention is August 31, 
2007.
    5. A prehearing conference will be held September 11, 2007 at 10 
a.m. in the Commission's hearing room.
    6. Participants intending to object to the Postal Service's 
proposal for limiting issues or intending to identify issue(s) that 
would indicate the need to schedule a hearing, shall file a written 
explanation of their position by September 7, 2007.
    7. The Secretary shall arrange for publication of this notice and 
order in the Federal Register.

    By the Commission.
Garry J. Sikora,
Acting Secretary.
 [FR Doc. E7-16089 Filed 8-15-07; 8:45 am]
BILLING CODE 7710-FW-P