[Federal Register Volume 73, Number 84 (Wednesday, April 30, 2008)]
[Notices]
[Pages 23507-23516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9464]


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POSTAL REGULATORY COMMISSION

[Docket No. PI2008-3; Order No. 71]


Universal Service Obligation

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: A recent law requires the Commission to submit to Congress, by 
late December 2008, a report on the universal service obligation. This 
notice informs the public of the Commission's obligation to prepare the 
report, provides background information, and seeks comments from the 
public.

DATES: Initial comments due June 30, 2008; reply comments due July 29, 
2008. See SUPPLEMENTARY INFORMATION section for field hearing dates.

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: 

I. Introduction

    Section 702 of the Postal Accountability and Enhancement Act, 
Public Law 109-435 (PAEA) requires the Postal Regulatory Commission 
(PRC or Commission) to submit a report to the President and Congress on 
``universal postal service and the postal monopoly in the United States 
* * * including the monopoly on the delivery of mail and on access to 
mailboxes.'' The report is to be submitted not later than December 19, 
2008.\1\
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    \1\ Section 702 of the PAEA requires that the report be 
submitted ``[n]ot later than 24 months after the date of enactment * 
* * .'' The PAEA was enacted on December 20, 2006. Since the final 
day of the 24-month period for completing and submitting the report 
falls on a Saturday and since the PAEA does not provide for an 
extension to the next business day, the report must be submitted not 
later than December 19, 2008.
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    In preparing its report, the PRC is required by section 702(c) to 
``consult with the Postal Service and other Federal agencies, users of 
the mails, enterprises in the private sector engaged in the delivery of 
the mail, and the general public[.]'' Section 702(c) provides further 
that the Commission shall address in its report any written comments 
that it receives.
    As part of its effort to fulfill these obligations, the Commission 
is initiating this docket to solicit comments on universal postal 
service and the postal monopoly. This notice also includes a Discussion 
Memorandum intended to provide background information and to present 
questions intended to elicit data and views that will assist the 
Commission in preparing its report.\2\ The views set forth in the 
Discussion Memorandum do not necessarily reflect the opinions or 
positions of the Commission or any individual Commissioner. They are 
provided solely for the purpose of stimulating discussion of relevant 
subjects and of providing an organizational framework for obtaining 
comments and suggestions.
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    \2\ See section IV. Discussion Memorandum For Use In Preparing 
Comments On Universal Postal Service and the Postal Monopoly Laws 
(Discussion Memorandum).
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    While commenters are free to organize their submissions in any 
manner they choose, it will facilitate analysis by the Commission and 
by other commenters if submissions follow the suggested topic outline 
in this notice and the Discussion Memorandum as much as possible. 
Commenters should, of course, feel free to address only such portions 
of the topic outline, and only the specific questions, they wish.
    This notice also includes a brief guide to sources of information 
that may be of use to commenters in preparing their submissions. 
Commenters are encouraged to use additional reference materials. The 
Commission requests that, if possible, reference materials not 
available from the Internet or readily available electronic databases 
(such as Westlaw, Lexis-Nexis, the Library of Congress, the Government 
Printing Office, and Journal Storage) be provided in a searchable pdf 
format.
    Initial comments are due 60 days after publication of this notice 
in the Federal Register. Reply comments are due 90 days after 
publication of this notice in the Federal Register. All comments and 
suggestions received will be available for review on the Commission's 
Web site at http://www.prc.gov.
    In addition to this solicitation of comments, the Commission 
intends to hold several public hearings at locations outside of 
Washington, DC in order to obtain further information. The dates and 
locations for those hearings are as follows: May 21, 2008 (2 p.m.), 
Flagstaff City Hall, 211 West Aspen Avenue, Flagstaff, AZ 86001; June 
5, 2008 (10 a.m.), City Hall/Court House Building, City Council 
Chambers, 3rd Floor, 15 Kellogg Boulevard, St. Paul, MN 55102; and June 
19, 2008 (2 p.m.), City Hall, 1 Junkins Avenue, Portsmouth, NH 03801.
    Additionally, the Commission intends to sponsor an open workshop in 
Washington, DC during May 2008 to receive public comment.
    Further details on the field hearings and other steps to be taken 
in this docket will be posted on the Commission's Web site at http://www.prc.gov.

II. Required Contents of the Commission's Report

    Section 702(a)(2) of the PAEA requires that the following subjects 
be included in the Commission's report:
    1. A comprehensive review of the history and development of 
universal service and the postal monopoly, including how the scope and 
standards of universal service and the postal monopoly have evolved 
over time for the nation and its urban and rural areas;
    2. The scope and standards of universal service and the postal 
monopoly provided under current law * * *, and current rules, 
regulations, policy statements, and practices of the Postal Service;
    3. A description of any geographic areas, populations, communities 
(including both urban and rural communities), organizations, or other 
groups or entities not currently covered by universal service or that 
are covered but that are receiving services deficient in scope or 
quality or both; and
    4. The scope and standards of universal service and the postal 
monopoly likely to be required in the future in order to meet the needs 
and expectations of the . . . public, including all types of mail 
users, based on discussion of such assumptions, alternative sets of 
assumptions, and analyses as the Postal Service considers plausible.
    PAEA section 702(b) provides further that if the Commission decides 
to recommend any changes to universal service and the postal monopoly 
(whether those changes could be made under current law or would require 
changes in current law), then the Commission must provide estimated 
effects of each recommendation on the service, financial condition, 
rates, and security of mail provided by the Postal Service. Finally, 
with respect to each recommendation concerning the universal service 
obligation or postal monopoly made in the reports required by PAEA 
sections 701 and 702, the Commission is required to include:

[[Page 23508]]

    1. An estimate of the costs * * * attributable to the obligation to 
provide universal service under current law;
    2. An analysis of the likely benefit of the current postal monopoly 
to the ability of the Postal Service to sustain the current scope and 
standards of universal service, including estimates of the financial 
benefit of the postal monopoly to the extent practicable, under current 
law; and
    3. Any additional topics and recommendations the Commission deems 
appropriate, together with estimated effects on service, financial 
condition, rates, and the security of mail.

III. Issues for Comment

    ``Universal postal service'' is the term commonly used to refer to 
postal service to all parts of the country. See United States Postal 
Serv. v. Flamingo Indus. (USA) Ltd., 540 U.S. 736 at 741 (2004) (citing 
39 U.S.C. 101, 403). The Postal Service's obligation to provide such 
``universal service'' is often referred to as the universal service 
obligation (USO). Although the USO lacks an express statutory 
definition, it often is thought of as an obligation with 
characteristics or features such as: (1) Geographic scope; (2) range of 
product offerings; (3) access to postal facilities and services; (4) 
frequency of delivery; (5) rates and affordability; and (6) quality of 
service. A USO is generally supported by granting exclusive rights to 
the postal administration to provide selected services--i.e., a postal 
monopoly. A number of countries, mostly in Europe, have begun to reduce 
or eliminate the postal monopoly over the past 10 years, while at the 
same time taking care to ensure some minimum level of service to each 
citizen. It is against this background that the United States Congress 
mandated the Commission's report.
    The Commission solicits comments from interested persons, including 
other Federal agencies, users of the mails, enterprises in the private 
sector engaged in the delivery of the mail, and the general public, on 
any or all aspects of the subjects to be included in the Commission's 
report and any additional topics and recommendations. Topics and 
specific questions that persons may wish to address include, but are 
not limited to, the following:
    Topic No. 1--scope of ``universal postal service'' and ``universal 
service obligation.'' Section 702(a)(2)(B) of the PAEA requires the 
Commission to include in its report ``the scope and standards of 
universal service and the postal monopoly provided under current law 
(including sections 101 and 403 of title 39, United States Code), and 
current rules, regulations, policy statements, and practices of the 
Postal Service.'' Thus, one of the Commission's fundamental tasks in 
preparing its report will be to define the concept of ``universal 
postal service''--or, more simply, ``universal service.'' The essential 
problem is that the term ``universal service'' is undefined in U.S. 
postal laws. In other industrialized countries that have addressed 
postal reform, the concept of universal postal service is linked to a 
second, closely related concept, that of a ``universal service 
obligation'' or USO. The USO is thus a legal obligation whereas 
``universal postal service'' is a set of postal services. While title 
39 includes standards that relate to the concept of ``universal 
service,'' neither title 39, nor other Federal statutes, define 
``universal service obligation.''
    In the absence of explicit statutory definitions, do the six 
factors listed above (i.e., geographic scope, range of product 
offerings, access to facilities and services, frequency of delivery, 
rates and affordability, and quality of services) adequately set forth 
the parameters of universal service and a universal service obligation? 
If not, what factors should, or legally must, be considered? In 
addressing these issues, commenters should consider the information in 
the Discussion Memorandum. Additional questions related to this topic 
also can be found in the Discussion Memorandum.
    Topic No. 2--historical development of universal service, the USO 
and monopoly laws. Section 702(a)(2)(A) of the PAEA requires the 
Commission's report to include ``a comprehensive review of the history 
and development of universal service and the postal monopoly, including 
how the scope and standards of universal service and the postal 
monopoly have evolved over time for the Nation and its urban and rural 
areas * * * .'' Specific questions related to this topic can be found 
in the Discussion Memorandum.
    Topic No. 3--universal service: geographic scope. Section 
702(a)(2)(C) of the PAEA requires the report to include ``a description 
of any geographic areas, populations, communities (including both urban 
and rural communities), organizations, or other groups or entities not 
currently covered by universal service or that are covered but that are 
receiving services deficient in scope or quality or both.'' Specific 
questions related to this topic can be found in the Discussion 
Memorandum.
    Topic No. 4--universal service: range of product offerings. 
Commenters are invited to comment on their anticipated needs and 
expectations with respect to the range of products that should be 
included in the concept of universal service. Commenters may wish to 
discuss their needs and expectations, as well as the needs and 
expectations of others--for example, all companies in the same sector 
or society generally. In providing their views, it would be helpful if 
commenters could provide general, non-confidential information on their 
current use of postal services, describing, if possible, current use by 
subclass, shape, and weight. In particular, it would be helpful if 
associations representing industrial sectors could provide estimates of 
the current use of universal services by their sectors and a summary of 
the needs and expectations of the sector for universal services in the 
future. Questions related to this topic can be found in the Discussion 
Memorandum.
    Topic No. 5--universal service: access to postal facilities and 
services. Commenters are invited to express their views on the need for 
access to post offices, the types of services that require access to 
post office facilities, the adequacy of existing post office 
facilities, and the adequacy of substituting contract post offices or 
other types of retail outlets for Postal Service post offices. In this 
connection, commenters may also wish to address the mailbox monopoly 
and its relationship with universal service and the universal service 
obligation. Specific questions related to this topic can be found in 
the Discussion Memorandum.
    Topic No. 6--universal service: frequency of delivery. In most 
parts of the United States, mail is delivered six days a week.\3\ 
Exceptions include delivery in certain remote areas in places such as 
Alaska where deliveries are less frequent. In other areas, deliveries 
of Express Mail are, for example, made seven days a week. Commenters 
may wish to address the question of what level of frequency is 
appropriate for universal services. Specific questions related to this 
topic can be found in the Discussion Memorandum.
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    \3\ Congress has, for a number of years, included a requirement 
of six-day-a-week delivery in various appropriation bills.
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    Topic No. 7--universal service obligation: rates and affordability 
of service. The rates for universal services are of importance to both 
the Postal Service and the customers who rely upon those services. Rate 
levels play a critical role in determining what services are offered 
and the affordability of those services. Specific questions

[[Page 23509]]

related to the issue of rates and affordability of service can be found 
in the Discussion Memorandum.
    Topic No. 8--universal service: quality of service. Prior to the 
PAEA, the services of the Postal Service were not subject to service 
standards that defined the percentage of items that must be delivered 
within specified periods after posting. Although the PAEA required the 
Postal Service to adopt such service standards, these standards are not 
the same as an externally defined USO requirement because they are 
devised by the Postal Service and subject to revision by the Postal 
Service. On the other hand, the PAEA did, for the first time, require 
the Postal Service to introduce external measurement of performance 
under these service standards (or an internal measurement approved by 
the Commission). In the European Union (EU), the regulator is typically 
required to both (1) establish quality of service standards, and (2) 
ensure independent monitoring of performance. Specific questions 
related to this topic can be found in the Discussion Memorandum.
    Topic No. 9--methods of calculating the cost of the universal 
service obligation and postal and mailbox monopolies. The PAEA and 
implementing regulations issued by the Commission introduced a modern 
system of rate regulation. Under the PAEA, the Commission is not 
scheduled to conduct an overall review of the modern system of 
regulation insofar as it applies to market dominant products until 
2016. 39 U.S.C. 3622(d)(3). Nonetheless, a revision of the USO and/or 
monopoly laws could imply modifications to recently adopted procedures 
for regulation of rates. Commenters are invited to provide any views 
and analyses with respect to such economic relationships. Specific 
questions related to this topic can be found in the Discussion 
Memorandum.
    Topic No. 10--the implications of the universal service obligation 
for the postal monopoly. Section 702(a)(2)(D) of the PAEA requires the 
Commission's report to include ``the scope and standards of universal 
service and the postal monopoly likely to be required in the future in 
order to meet the needs and expectations of the * * * public * * * .'' 
In addition, section 702(b) requires the Commission to provide the 
estimated effects of any recommended changes to universal service and 
the postal monopoly, as well as an analysis of the likely benefit of 
the current postal monopoly to the Postal Service to sustain the 
current scope and standards of universal service.
    Previous topics identified in this notice have focused on the 
implications of the postal monopoly and mailbox monopoly for the 
universal service obligation.\4\ This topic focuses on the implications 
of the universal service obligation for the postal and mailbox 
monopolies. In addressing this topic, commenters should discuss how 
their conception of the universal service obligation would affect the 
need for, and parameters of, the postal monopoly and mailbox monopoly. 
Specific questions related to this topic can be found in the Discussion 
Memorandum.
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    \4\ See Topic No. 2 (the history, development, and evolution of 
the universal service obligation and the postal monopoly); Topic No. 
4 (the effect of the postal monopoly on the range of universal 
service product offerings); Topic No. 5 (the role of the mailbox 
monopoly in supporting universal service and the universal service 
obligation); Topic No. 6 (the implication of the postal monopoly for 
the frequency of delivery of universal services); Topic No. 7 (the 
relationship between the monopoly laws and rates for universal 
service); and Topic No. 9 (the relationship between benefits and 
costs of the postal monopoly, the mailbox monopoly, and the 
universal service obligation).
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    Topic No. 11--universal service, the universal service obligation 
and the postal monopoly in other countries. Commenters are invited to 
provide any views and analyses of the evolution of universal service, 
the USO, and the postal monopoly in other industrialized countries and 
to comment upon the possible relevance, or lack of relevance, of such 
examples for the current study. Specific questions related to this 
topic can be found in the Discussion Memorandum.
    Topic No. 12-other issues. Commenters are invited to provide any 
views and analyses on subjects not covered by the preceding topic 
headings, including, for example, views and/or analyses on broader 
social, economic, and technological trends that may affect the future 
needs and expectations of society generally with respect to universal 
service in 3 years, 5 years, 10 years, and 15 years. Specific questions 
related to this topic can be found in the Discussion Memorandum.
    Commenters are reminded that if the Commission recommends any 
changes to universal service and the postal monopoly, the Commission 
must provide estimated effects of each recommendation on the service, 
financial condition, rates, and security of mail provided by the Postal 
Service. Those recommending changes would assist the Commission if they 
also provide information on these effects.

IV. Sources of Information

    This section provides a brief guide to sources of additional 
information about universal postal service, the USO, and monopoly laws 
for commenters who are not familiar with these topics. The following 
discussion focuses on selected official proceedings and reports 
prepared for U.S. and foreign government agencies that are readily 
accessible in English. Within these proceedings and reports, readers 
will find references to the far richer array of academic studies and 
advocacy papers that illuminate the issues presented by the present 
study.
    Four earlier Commission proceedings appear to address issues 
related to the present proceeding. In Regulations Implementing Private 
Express Statutes, Docket No. RM76-4 (1976), the Commission concluded 
that the postal laws did not at that time grant the Commission 
jurisdiction over regulations defining the postal monopoly. In Monopoly 
Theory Inquiry, Docket No. RM89-4 (1989), the Commission concluded a 
general inquiry into the economics of the postal monopoly and issued a 
lengthy report on its findings. Records of these proceedings may be 
found in the archives section of the Commission's Internet site. In 
addition, the Commission has recently initiated two public inquiries 
related to service standards for market dominant universal services. In 
Service Standards and Performance Measurement for Market Dominant 
Products, Docket No. PI2007-1 (2007), the Commission developed comments 
on service standards proposed by the Postal Service. In Service 
Performance Measurement Systems For Market Dominant Products, Docket 
No. PI2008-1 (ongoing), the Commission is reviewing service performance 
measurement procedures proposed by the Postal Service.
    Commission staff and subcontractors for the Commission have also 
prepared several papers on the economics of universal service and the 
postal monopoly. These are posted on the Commission's Internet site 
under ``Speeches and Papers, Papers, PRC Staff.'' Professor Richard B. 
Kielbowicz prepared a study on the history of universal postal service 
under contract with the Commission; it can be found under ``Speeches 
and Papers, Papers, Kielbowicz.'' More generally, the Commission's 
Internet site includes a wealth of legislative histories, judicial 
decisions, and economic data pertaining to the period after enactment 
of the Postal Reorganization Act of 1970 (PRA).
    Other U.S. governmental analyses of universal service and the 
postal monopoly include the following: in

[[Page 23510]]

2003, the President's Commission on the United States Postal Service 
undertook an extensive review of postal policy in the United States; 
much of the analyses, testimonies, and studies prepared for the 
President's Commission bear directly on issues presented by the current 
study.\5\ The General Accounting Office has prepared many reports on 
postal service and postal policy; two of these specifically address the 
monopoly laws: Postal Service Reform Issues Relevant to Changing 
Restrictions on Private Letter Delivery (1996) (2 volumes), and U.S. 
Postal Service: Information About Restrictions on Mailbox Access 
(1997). In 1973, the Board of Governors of the Postal Service issued a 
report on the postal monopoly law, Statutes Restricting Private 
Carriage of Mail and Their Administration, required by the PRA.\6\ The 
Postal Service also offers a history of the postal service in the 
United States on its Internet site.\7\
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    \5\ See http://www.treasury.gov/offices/domestic-finance/usps 
for the final report and documents of the Commission.
    \6\ Also reprinted in House Comm. on Post Office and Civil 
Service, 93d Cong., 1st Sess., Comm. Print No. 93-5 (1973).
    \7\ See http://www.usps.com/postalhistory/welcome.htm.
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    Outside the United States, several governments have undertaken 
official inquiries similar to the present study. In particular, 
PostCom, the postal regulator in the United Kingdom, has conducted 
extensive consultations into the appropriate scope of universal service 
and the need for the postal monopoly. Documents posted on PostCom's 
Internet site include detailed economic and legal analyses, although it 
should be noted that postal laws in the United Kingdom differ 
significantly from those in the United States.\8\ The Commission of the 
EU has also contracted for, and posted on, the Internet numerous 
analyses of universal service, the postal monopoly, and economics of 
postal services.\9\ In Australia, the National Competition Council 
issued a detailed review of the postal law in 1989, Review of the 
Australian Postal Corporation Act.\10\ In New Zealand, a lively account 
of postal reform is provided by Vivienne Smith, Reining in the 
Dinosaur: The Remarkable Turnaround of New Zealand Post (1989), a book 
published by New Zealand Post and available from Internet book sellers.
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    \8\ See http://www.psc.gov.uk/universal-service/defining-the-universal-service.html and http://www.psc.gov.uk/policy-and-consultations/consultations/market-opening-timetable.html.
    \9\ See http://ec.europa.eu/internal_market/post/studies_en.htm for a list of all postal studies prepared for the European 
Commission.
    \10\ See http://www.ncc.gov.au/index.asp under ``Communications, 
Australia Post.''
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V. Public Representative

    Section 505 of title 39 requires the designation of an officer of 
the Commission in all public proceedings to represent the interests of 
the general public. The Commission hereby designates Emmett Rand 
Costich to serve as the Public Representative, representing the 
interests of the general public. Pursuant to this designation, he will 
direct the activities of Commission personnel assigned to assist him 
and, will, upon request, provide their names for the record. Neither he 
nor any of the assigned personnel will participate in or provide advice 
on any Commission decision in this proceeding.

VI. Discussion Memorandum for Use in Preparing Comments on Universal 
Postal Service and the Postal Monopoly Laws

    Section 702 of the PAEA requires the Postal Regulatory Commission 
to prepare a report on ``universal postal service and the postal 
monopoly in the United States * * * including the monopoly on the 
delivery of mail and on access to mailboxes.'' Public Law 109-435, 
Sec.  702, 120 Stat. 3198, 3243. This report on universal postal 
service and the postal monopoly laws is to be submitted to Congress and 
the President by December 19, 2008.
    The purpose of this memorandum is to stimulate discussion by 
identifying a number of topics and specific questions that commenters 
may wish to address. The list of topics and questions is not intended 
to exclude commenters from presenting views or opinions on other topics 
or issues.\11\
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    \11\ The views set forth in this section do not necessarily 
reflect the opinions or positions of the Commission or any 
individual Commissioner.
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A. Topic No. 1: Scope of ``Universal Postal Service'' and ``Universal 
Service Obligation''

1. Topic No. 1.1: ``Universal Postal Service''
    At the beginning of the 21st century, it is readily apparent that 
the United States is served by a national system of collection and 
delivery services that is ``universal'' in many respects. Almost every 
person in every corner of the country can send a letter or document or 
parcel to almost anyone in every corner of the country and expect the 
addressee to receive the letter, document, or parcel. Indeed, in many 
cases, the sender may choose among different price/service options 
offered by the Postal Service and private delivery services. Which of 
these services should be regarded as ``universal services'' and which 
should be regarded as non-universal delivery services? Are only 
services offered by the Postal Service to be considered ``universal 
services'' despite the national reach of several private delivery 
services individually and the network of private delivery services 
collectively? Put differently, should an evaluation of the ``needs and 
expectations of the United States public'' consider only services 
provided by the Postal Service? Indeed, considering the Postal Service 
alone, are all its services ``universal services'' or only some?
    ``Universal service'' does not appear at all in the U.S. Code. Nor 
does the PAEA separately define ``universal service.'' The PAEA uses 
``universal service'' in only two places, neither is included in the 
U.S. Code; the section requiring a study of universal service and the 
postal monopoly (section 702) and the section requiring a study of the 
future business model of the Postal Service (section 710). Nonetheless, 
for purposes of the current report, the term ``universal service'' must 
be defined in some manner and that definition must be consistent with 
the requirements of section 702 of the PAEA and the intent of Congress 
in requiring this report.
    The text of the PAEA is one potential starting point for 
interpreting the term ``universal service.'' Section 702 employs 
``universal service'' or ``universal postal service'' nine times. From 
its context, ``universal service'' could be characterized by scope and 
constrained by legal standards set out in current laws, including 
rules, regulations, policy statements, and/or practices of the Postal 
Service. ``Universal service'' may be said to ``cover'' geographic 
areas and/or groups of persons, and some areas or groups may be said to 
be not now covered by universal service. An obligation to provide 
``universal service'' may result in costs for the Postal Service. 
Section 710, the only other provision of the PAEA to refer to 
``universal service,'' uses the phrase twice, most significantly in 
reference to ``continued availability of affordable, universal postal 
service throughout the United States.''
    Sections 101 and 403 of the U.S. Code can also be read to provide 
standards for ``universal service.'' A review of these two sections 
suggests ``universal service'' could be read to refer to a postal 
service or set of postal services that is characterized by several 
features or service elements that are attained to such a degree or in 
such a manner that postal service may be considered

[[Page 23511]]

``universal.'' Together sections 101 and 403 identify service elements 
and the level of attainment which could be used to define a ``universal 
service'':
    a. Geographic scope. ``Universal service'' provides services 
``throughout the United States'' (section 403(a)) that serve ``all 
areas'' and ``all communities'' (section 101(a)), especially rural 
areas (section 101(b)) and ``as nearly as practicable the entire 
population of the United States'' (section 403(b)(1)) and also provides 
services to or from military personnel abroad (section 403(a)).
    b. Range of products. ``Universal service'' transmits a range of 
postal items including ``written and printed matter, parcels, and like 
materials'' (section 403(a)) suited to ``the needs of different 
categories of mail and mail users'' (section 403(b)(2)).
    c. Access facilities. ``Universal service'' provides mailers 
``ready access'' to the postal system through an appropriate level of 
post offices and other access facilities ``consistent with reasonable 
economies'' (section 403(b)(3)), especially in rural areas (section 
101(b)).
    d. Delivery services. ``Universal service'' provides for the 
receipt, transmission, and delivery of postal items (section 403(a)).
    e. Rates and affordability of service. ``Universal service'' 
charges prices that are fair, reasonable (section 403(a)), non-
discriminatory (section 403(c)), and based on a ``fair and equitable'' 
apportionment of costs (section 101(d)).
    f. Quality of service. ``Universal service'' provides for the 
prompt, reliable, efficient (section 101(a)), and adequate (section 
403(a)) transmission of postal items, with particular attention to the 
``most expeditious'' transmission of letters (section 101(e)).
    Such a six-pronged concept of universal service would appear to be 
fully consistent with the manner in which the term ``universal 
service'' is used in section 702.
    At a conceptual level, a proposed definition of ``universal 
service'' may be similar to the concept of universal service formally 
adopted in the EU. In the EU, the Postal Directive \12\ refers to 
universal service as the ``permanent provision of a postal service of 
specified quality at all points in their territory at affordable prices 
for all users.'' The six service elements derived from sections 101 and 
403 of the U.S. law seem to be reflected in the elements of universal 
service described in the EU Postal Directive. The EU Postal Directive 
includes a seventh service element, users' rights of complaint and 
redress, which has no counterpart in sections 101 and 403. A broad 
similarity in how the term ``universal service'' is used in the PAEA 
and EU Postal Directive also appears to be plausible since it appears 
possible that the postal reform debate in Europe in the late 1980s and 
early 1990s led to use of the term ``universal service'' in the 
somewhat later postal reform debates in the United States.
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    \12\ Directive 1997/67/EC of the European Parliament and of the 
Council of 15 December 1997 on common rules for the development of 
the internal market of community postal services and the improvement 
of quality of service, OJ L 15, 21 Feb. 1998, p. 14, as amended by 
Directive 2002/39/EC of the European Parliament and of the Council 
of 10 June 2002 amending Directive 97/67/EC with regard to further 
opening to competition of community postal services, OJ L176, 5 July 
2002, p. 21 and Directive 2008/6/EC of the European Parliament and 
of the Council of 20 February 2008 amending Directive 97/67/EC with 
regard to the full accomplishment of the internal market of 
community postal services, OJL 52, 27 February 2008, p. 3.
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    On the other hand, the six-pronged approach towards defining 
``universal postal service'' described above does not include all of 
the public service activities of the Postal Service nor all of the 
characteristics of the postal services offered by the Postal Service. 
This concept does not, for example, include the assistance that the 
Postal Service provides to the Department of State in the processing of 
passport applications (other than the provision of postal services for 
such applications). Likewise, it does not include law enforcement 
activities of the Postal Inspection Service. Such activities are 
certainly ``public services,'' but they do not seem to be ``universal 
postal service'' as that term is used in section 702 of the PAEA.\13\
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    \13\ Section 3651(c) of title 39, added by the PAEA, appears to 
draw a similar distinction when it refers to ``other public services 
or activities which, in the judgment of the Postal Regulatory 
Commission, would not otherwise have been provided by the Postal 
Service but for the requirements of law.''
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    Likewise, the foregoing approach to ``universal postal service'' 
would not include attributes of the Postal Service which are not 
elements of the services actually provided the public. For example, 
section 101 refers to at least two objectives of national postal policy 
that are not included in the six-pronged approach described above: (1) 
Fair conditions of employment (sections 101(c) and 101(g)), and (2) a 
fair and equitable distribution of mail transportation contracts 
(section 101(f)). While these goals affect the manner in which the 
Postal Service operates, they do not seem to relate to the ``service'' 
provided to mailers and addressees. According to common usage, a 
``service'' is the ``helping or doing work for someone else.'' \14\ 
Preliminarily, it would appear that the term ``universal service'' as 
used in section 702 of the PAEA refers to services provided by the 
Postal Service and not to non-service attributes of the Postal Service. 
This view appears to be supported by a review of legislative history. 
Committee reports leading to the PAEA treat universal service and 
employment as separate issues. The U.S. House of Representatives report 
refers to ``The legislation creates a modern system of rate regulation, 
establishes fair competition rules and a powerful new regulator, 
addresses the Postal Service's universal service obligation and the 
scope of the mail monopoly, and institutes improvements to the 
collective bargaining process.'' (Emphasis added.) H.R. Rept. No. 109-
66 (2005) at 43. Thus, the universal service obligation seems 
distinguishable from the collective bargaining process. Likewise, the 
U.S. Senate report refers to ``the basic features of universal 
service--affordable rates, frequent delivery, and convenient community 
access to retail postal services.'' S. Rept. No. 108-318 (2004) at 1. 
Likewise, in Congressional debates, leaders in the preparation of the 
PAEA also seemed to indicate an understanding that universal service 
and employment practices were different matters of concern. See, e.g., 
152 Cong. Rec. H6512 (July 26, 2005) (remarks of Mr. T. Davis of 
Virginia) (``For consumers it preserves universal service, maintains 
high-quality standards, and eliminates unfair mailing costs so that 
they have an affordable and reliable means of communication. For 
workers it protects collective bargaining and offers whistleblower 
protections that are needed to ensure safe employment.''); 152 Cong. 
Rec. H6513 (July 26, 2005) (remarks of Mr. T. Davis of Virginia) 
(``Universal service. First and foremost, the bill preserves the Postal 
Service's commitment to universal service, the guaranteed delivery 6 
days a week to each and every address in the United States.''); 152 
Cong. Rec. H9179 (December 8, 2006) (remarks of Mr. Waxman of 
California) (``This bill has many highlights. It provides for 
ratemaking flexibility, rate stability, universal service, high quality 
standards, and collective bargaining.''); 152 Cong. Rec. H9180 
(December 8, 2006) (remarks of Mr. McHugh of New York) (``The universal 
service mission of the Postal Service remained the same, as stated in 
title 39 of the U.S. Code: `The Postal Service shall have as its basic 
function

[[Page 23512]]

the obligation to provide postal services to bind the Nation together 
through the personal, educational, literary, and business 
correspondence of the people. It shall provide prompt, reliable, and 
efficient services to patrons in all areas and shall render postal 
services to all communities.''')
---------------------------------------------------------------------------

    \14\ See The New Oxford American Dictionary 2001.
---------------------------------------------------------------------------

    It should also be noted that although the foregoing definition of 
``universal postal service'' and EU Postal Directive address similar 
service elements, they differ significantly in the level of attainment 
or manner of implementation. As a result, a broadly defined definition 
of ``universal service,'' like the one set forth above, is quite 
different from the more specifically defined definition of ``universal 
service'' set out in the Postal Directive. For example, the EU 
definition of ``universal service'' excludes express services and 
parcel services for parcels weighing more than 20 kg. (44 pounds), 
while section 702 makes no such distinction. Similarly, the EU 
definition includes within the universal service area services provided 
by private operators, whereas section 702 is unclear about the 
applicability of the concept to private delivery services.
    A working definition of universal service for purposes of the 
study. In light of the preceding discussion, one possibility would be 
for the Commission to use a working definition of universal service 
like the following:
    Universal service refers to a postal service or set of postal 
services that is characterized by six features or service elements that 
are attained to such a degree or in such a manner that postal service 
may be considered ``universal.'' The six service elements are as 
follows, and in each case the level or manner of attainment presently 
considered characteristic of universal service are noted: (1) 
Geographic scope. Universal service provides services throughout the 
United States, serving all areas and all communities, especially rural 
areas, and as nearly as practicable the entire population of the United 
States and also providing service to or from military personnel abroad. 
(2) Range of products. Universal service transmits a range of postal 
items including written and printed matter, parcels, and like materials 
suited to the needs of different categories of mail and mail users. (3) 
Access. Universal service provides mailers ready access to the postal 
system through an appropriate level of post offices and other access 
facilities consistent with reasonable economies, for both urban and 
rural areas. (4) Delivery services. Universal service provides for the 
receipt, transmission, and delivery of postal items. (5) Rates and 
affordability of service. Universal service charges prices that are 
fair, reasonable, non-discriminatory, and based on a fair and equitable 
apportionment of costs. (6) Quality of service. Universal service 
provides for the prompt, reliable, efficient, and adequate transmission 
of postal items, with particular attention to the most expeditious 
transmission of letters.
    Such a definition is self-evidently imprecise and open-ended in 
several respects. Different observers could come to different 
conclusions, such as when universal postal service was first attained 
in the United States or whether the Postal Service presently provides 
prompt, reliable, efficient, and adequate services in all cases or 
serves as nearly as practicable the entire population of the United 
States. This definition leaves unresolved whether private operators may 
be considered to provide a portion of the universal service. 
Nonetheless, this open-endedness would seem to be generally consistent 
with the way the term ``universal service'' is used in the PAEA. Under 
such a definition, ``universal service'' would refer to a general 
concept and not to specific pattern of service.
    Even if open-ended, such a working definition of ``universal 
service'' (or an alternative) would offer guidance for the report 
required by section 702 of the PAEA. For example, such a definition 
would permit a determination of what aspects of national postal service 
should be included in the ``history and development'' and ``scope and 
standards'' of universal service. Guided by such a definition, the 
study can focus on the history, development, standards, and future of 
the six service elements identified and the concept of universal 
service generally.
    It bears emphasis that a working definition of ``universal postal 
service'' is proposed only for the purposes of putting bounds on the 
scope of the report required by section 702. The proposed definition 
should not be interpreted as a proposal for a statutory definition of 
``universal postal service,'' still less as a definition of the scope 
of a ``universal service obligation'' (see next section).
    Commenters should carefully consider the foregoing definition of 
the concept of ``universal postal service'' and should comment on 
whether this, or some other, definition should be used in preparing the 
Commission's report. Questions that should be addressed include: What 
factors should be included/excluded from the definition of ``universal 
postal service?'' What specific statutory text, legislative history or 
other considerations support the commenter's proposed definition of 
``universal postal service''?
2. Topic No. 1.2: ``Universal Service Obligation''
    The USO is a legal measure that guarantees availability of, in the 
words of the EU Postal Directive, ``a universal postal service 
encompassing a minimum range of services of specified quality to be 
provided in all Member States at an affordable price for the benefit of 
all users, irrespective of their geographical location.'' \15\ The USO 
may take the form of a statutory command to government as a whole or to 
its public postal operator. If government is the object of the USO, 
then government will typically direct an independent postal regulator 
or ministry to administer a licensing system that obliges one or more 
postal operators to provide universal services.
---------------------------------------------------------------------------

    \15\ Directive 1997/67/EC, OJ L 15, 21 February 1998, p. 14, 
Recital 11.
---------------------------------------------------------------------------

    The USO seeks to insure that a basic level of universal postal 
services will be maintained. The USO does not have to be a set of 
objectives for the services actually provided. For example, the scope 
of universal postal service actually provided by the public postal 
operator (and perhaps other postal operators obliged to provide 
universal services) could exceed minimum standards set by a USO. For 
example, in a given country, the USO might require a delivery to all 
addresses at least five days per week, but the public postal operator 
might deliver six days a week to some or all addresses because it 
considers six-day service good business. Similarly, the USO might 
require that at least 80 percent of postal items be delivered by the 
end of the first business day after posting, whereas the public postal 
operator might in fact deliver 90 percent of postal items within that 
period. Viewed in this way, ``universal service'' would be an 
operational concept, whereas ``universal service obligation'' would be 
a legal concept.
    It should be noted that the foregoing definition of the universal 
service obligation would not include several things. While the Postal 
Service was established by law to provide postal services to the nation 
generally, it must supply these services in accordance with a host of 
statutory requirements. According to the foregoing definition, however, 
not all of these requirements would necessarily be ``universal 
service'' requirements. Many requirements, for example, treatment of 
employees according to certain governmental standards or standards with 
respect to Federal contracting, do

[[Page 23513]]

not relate to the six service elements of universal service identified 
in section 1. They would remain even if the Postal Service were not 
obliged to provide universal service. Hence, such requirements, 
although admittedly legal constraints imposed on the Postal Service, 
would not be considered universal service requirements or part of the 
universal service obligation. Nor would this approach include within 
the concept of ``universal service obligation'' requirements which the 
Postal Service imposes on itself. By its nature, an ``obligation'' 
seems to refer to an externally-imposed requirement.
    The ``universal service obligation,'' if so defined, would include 
all legal obligations imposed on the Postal Service relating to the six 
service elements of universal service: the geographic scope of 
services, the range of products, access facilities, delivery services, 
level and structure of rates (including non-discrimination), and 
quality of service. This definition of the USO would reach well beyond 
the language of sections 101 and 403. Under current law, there are four 
main sources of legal standards for universal postal service: the U.S. 
Code, appropriations bills for the Postal Service, the Universal Postal 
Convention, and regulations adopted by the Commission.
    The U.S. Code includes numerous standards which relate the six 
prongs of ``universal service'' as provided by the Postal Service. For 
example, section 407 makes clear that universal service should include 
collection and delivery of international mail as well as domestic mail. 
On the other hand, the scope of universal service is limited by 
sections 3001 to 3010, 3014, and 3015, which prohibit carriage of 
certain non-mailable items, and section 3682, which places size and 
weight limits on mailable matter. Section 3691 establishes standards 
for quality of service. Several provisions of the U.S. Code regulate 
rates. Section 404(c) requires uniform national rates for letters, 
while section 3638 requires uniform rates for books and films. Sections 
3403, 3404, 3626, and 3629 provide for free or reduced rates for 
certain items. Sections 3621 to 3634 require the Postal Regulatory 
Commission to control rates according to certain standards. Section 
404(d) requires the Postal Service to follow certain procedures before 
closure of post offices. Whatever net costs the Postal Service incurs 
as a result of such legal restrictions might be properly considered 
costs of the USO.
    The annual appropriations bill for the Postal Service can affect 
the provision of universal service in two ways. First, the amount of 
money provided affects the scope of services that can be offered by the 
Postal Service. Second, the appropriations bill may include substantive 
provisions (called ``riders'') that direct how the Postal Service is to 
spend the money appropriated. For example, in the 2006 postal 
appropriations bill, Congress included two riders related to universal 
service: (1) That six-day delivery and rural delivery of mail shall 
continue at not less than the 1983 level; and (2) that none of the 
funds provided in this Act shall be used to consolidate or close small 
rural and other small post offices in fiscal year 2006.
    In the Universal Postal Convention (2004), the United States agreed 
with other member countries of the Universal Postal Union to provide 
certain universal services under certain conditions until December 31, 
2009. These commitments relate primarily to the geographic scope of 
services, the quality of services, and the rates charged.
    The Postal Regulatory Commission adopts regulations which create 
standards for universal services, primarily in the area of rates and 
accounting for the costs that underlie rates.
    Commenters should consider the foregoing approach to the concept of 
``universal service obligation'' as an interpretation of section 702 of 
the PAEA. Other approaches can be considered as well. Commenters are 
invited to address such questions as:
    a. What specific legal provisions constitute a complete statement 
of the current USO?
    b. What should be included/excluded from the concept of USO?
    c. What specific statutory text, legislative history, or other 
basis exists to support a USO concept?
    d. What is the precise scope of the postal monopoly under current 
law?
    e. What is the precise scope of the mailbox monopoly under current 
law?

B. Topic No. 2--Historical Development of Universal Service, the USO, 
and Monopoly Laws

    Specific questions regarding the historical development of 
universal service, the USO, and monopoly laws which appear to be 
relevant to the present study and which commenters may wish to address 
include, but are not limited to, the following:
    1. When were the specific provisions of the monopoly laws adopted? 
In each case, what was the intent of Congress?
    2. How has the precise scope of postal monopoly law changed over 
the years?
    3. How did the pattern of service provided by the Post Office 
Department and later the Postal Service evolve into the present 
universal service?
    4. How did the legal authority of the Post Office Department and 
later the Postal Service develop with respect to the six service 
elements of universal service?
    5. How and when did the general concept of a USO evolve?
    6. How are the monopoly laws and USO related historically?
    7. How has use of universal services changed over the last five 
years, both in terms of volumes and mail mix?
    8. What have been the major factors influencing demand for 
universal services over the last five years both in terms of volumes 
and mail mix?
    9. What has been the effect of the Internet on demand?

C. Topic No. 3--Universal Service: Geographic Scope

    Specific questions regarding the geographic scope of universal 
service and the postal monopoly which appear to be relevant to the 
present study and which commenters may wish to address include, but are 
not limited to, the following:
    1. What geographic areas, populations, communities, organizations, 
or other groups or entities, if any, are not currently covered by the 
USO identified above?
    2. What other gaps or deficiencies, if any, exist in the current 
USO? For example, a commenter may consider that the current USO fails 
to address a subject that should be addressed or sets a standard 
inappropriately.
    3. What geographic areas, populations, communities, organizations, 
or other groups or entities, if any, are currently receiving universal 
services that are deficient in some manner? How should the word 
``deficient'' be interpreted in this context?

D. Topic No. 4--Universal Service: Range of Product Offerings

    Specific questions regarding the range of product offerings which 
appear to be relevant to the present study and which commenters may 
wish to address (either in terms of their own experience or in terms of 
their views regarding the needs of others) include, but are not limited 
to, the following:
    1. What postal products should be legally assured service by a USO? 
What products should be supplied according to normal market 
arrangements between mailers and sellers of postal services?
    2. Should express services be covered by the USO? Advertisements? 
First-Class Mail such as statements and invoices? Bulk First-Class

[[Page 23514]]

advertisements? Single-Piece First-Class Mail? Personal correspondence 
only? Newspapers and magazines? Bulk parcels? Single-piece parcels? 
Competitive products generally? With respect to each product covered by 
the USO, what public policies require coverage of that product?
    3. How does the postal monopoly affect the range of universal 
service product offerings?
    4. How should the postal monopoly affect the range of universal 
service product offerings?
    5. Should universal service include special services such as 
Registered Mail, Certified Mail, and insurance for some or all 
universal services (as in the EU)? Should the USO require provision of 
such special services?
    6. Should universal service include a lower priority, lower priced 
alternative for the delivery of letters (as in the United Kingdom and 
many other countries)? Should the USO require introduction of such a 
``second priority'' letter service?
    7. For parcels, is there an appropriate weight limit for the USO?
    8. In the case of each product, what special considerations, if 
any, support inclusion or exclusion of the international postal 
products?
    9. How should changes in mail volumes and mail mix over the next 3, 
5, 10, or 15 years affect the USO?
    10. To what extent, if any, should the universal service obligation 
permit the Postal Service (and/or other operators engaged in provision 
universal service) to expand or contract the geographic scope of 
universal service compared to that presently served by the Postal 
Service?

E. Topic No. 5--Universal Service: Access to Postal Facilities and 
Services

    Questions regarding access to postal facilities and services which 
appear to be relevant to the present study and which commenters may 
wish to address (either in terms of their own experience or in terms of 
their views regarding the needs of others) include, but are not limited 
to, the following:
    1. To what extent will the need for access facilities (including 
post offices, contract post offices, and collection boxes) expand or 
contract in 3 years, 5 years, 10 years, and 15 years?
    2. What types of transactions require mailers to come to a post 
office in order to post a postal item? To what extent will changing 
technologies modify the demand for such retail services in 3 years, 5 
years, 10 years, and 15 years?
    3. What types of transactions require mailers to come to a post 
office in order to receive postal items? To what extent will changing 
technologies modify the demand for such services in 3 years, 5 years, 
10 years, and 15 years?
    4. To what extent do contract post offices (i.e., stores providing 
postal services operated by non-USPS personnel) serve as satisfactory 
substitutes for USPS post offices? Under what circumstances do they 
not?
    5. To what extent should access facilities be assured by inclusion 
in a universal service obligation in 3 years, 5 years, 10 years, and 15 
years? To what extent should USO access requirements, if any, apply 
differently to different universal service products?
    6. To what extent should the Postal Service be permitted by the USO 
to substitute contract post offices for USPS post offices? \16\
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    \16\ In some countries, like the United Kingdom, more than 90 
percent of post offices are contract post offices.
---------------------------------------------------------------------------

    7. To what extent should the USO in the future (i.e., in 3 years, 5 
years, 10 years, and 15 years) require delivery to each address in the 
nation (as in the EU)?
    8. To what extent should the USO in the future (i.e., in 3 years, 5 
years, 10 years, and 15 years) include requirements for delivery of 
postal items to persons without an address? \17\
---------------------------------------------------------------------------

    \17\ See, e.g., Currier v. Potter, 379 F.3d 716 (9th Cir. 2004) 
in which the court upheld an order by the Postal Service denying 
homeless individuals no-fee postal mailboxes and refused to provide 
them general delivery service anywhere but a at main, downtown post 
office.
---------------------------------------------------------------------------

    9. Does the mailbox monopoly still serve a useful role in 
supporting universal service and the universal service obligation?
    10. What changes, if any, should be made to the mailbox monopoly to 
enhance the ability of mailers to reach mail recipients or to broaden 
the range of services available to mail recipients?

F. Topic No. 6--Universal Service: Frequency of Delivery Commenters Are 
Invited To Comment on Their Anticipated Needs and Expectations With 
Respect to Frequency of Universal Services

    1. What are the major factors that influence the needs and 
expectations of mailers with respect to delivery frequency?
    2. What are the major factors that influence the needs and 
expectations of addressees with respect to delivery frequency?
    3. To what extent would it be appropriate for universal service in 
the future (i.e., in 3 years, 5 years, 10 years, and 15 years) to 
provide for a delivery frequency of 7, 6, 5, 4, 3, or 2 days per week, 
i.e., more or less than currently provided by the Postal Service?
    4. To what extent should the legal standards set out in the USO 
permit a delivery frequency of 7, 6, 5, 4, 3, or 2 days per week, i.e., 
more or less than currently provided by the Postal Service?
    5. To what extent would it be appropriate for universal service in 
the future (i.e., in 3 years, 5 years, 10 years, and 15 years) to vary 
delivery frequency by the volume and characteristics of mail, by, for 
example, providing more frequent delivery for letters than for 
advertisements or more frequent delivery in areas that receive high 
volumes of mail than in areas that receive low volumes of mail?
    6. To what extent should the legal standards set out in the USO 
permit universal service in the future to vary delivery frequency by 
the volume and characteristics of mail?
    7. To what extent would mailers be interested in a discount service 
that provides less than six days per week? To what extent would mailers 
be interested in a higher priced service that includes Sunday delivery?
    8. What implications, if any, does the postal monopoly have for the 
frequency of delivery of universal services?

G. Topic No. 7--Universal Service Obligation: Rates and Affordability 
of Service

    1. Should the USO in the future (i.e., 3 years, 5 years, 10 years, 
and 15 years) require that rates for universal service are 
``affordable'' (as in the EU)? To what extent should affordability 
assurances, if any, apply differently to different universal service 
products? How should ``affordable'' be defined?
    2. Should the USO in the future (i.e., 3 years, 5 years, 10 years, 
and 15 years) require that rates for universal services are not unduly 
or unreasonably discriminatory (see 39 U.S.C. 403(c))? To what extent 
should such prohibitions, if any, apply differently to different 
universal service products?
    3. Should the USO in the future (i.e., 3 years, 5 years, 10 years, 
and 15 years) require that increases in rates for market dominant 
universal services are limited to increases in the Consumer Price Index 
applied at the class level (see 39 U.S.C. 3622)? To what extent should 
such controls apply differently to different market dominant universal 
service products?
    4. To what extent, if at all, should the USO in the future (i.e., 3 
years, 5 years, 10 years, and 15 years) regulate rates for personal 
correspondence or single-piece postal items in a different manner from

[[Page 23515]]

regulation of rates for bulk market dominant products? \18\
---------------------------------------------------------------------------

    \18\ For example, in the United Kingdom, PostCom has grouped 
market dominant products into two baskets for purposes of 
administering price caps. The first basket includes ``captive'' 
single-piece items, and the second basket includes ``non-captive'' 
bulk items. See PostCom, 2006 Royal Mail Price and Service Quality 
Review: Initial Proposals (June 2005) at paras. 3.24 et seq.
---------------------------------------------------------------------------

    5. To what extent, if at all, should the USO in the future (i.e., 3 
years, 5 years, 10 years, and 15 years) require that rates for each 
class of mail for the transmission of letters be uniform throughout the 
United States (see 39 U.S.C. 404(c))?
    6. To what extent, if at all, should the USO in the future (i.e., 3 
years, 5 years, 10 years, and 15 years) permit introduction of rates 
for market dominant bulk mail that vary according to the cost of 
delivery? According to the costs of transportation from origin? For 
example, for bulk mail, the Postal Service might charge more for 
delivery in high-cost areas and less for the delivery in low-cost 
areas.\19\
---------------------------------------------------------------------------

    \19\ Bulk mail rates that vary by cost of delivery are becoming 
accepted in the European Union. For a discussion of policy 
implications, see PostCom, Royal Mail's Retail Zonal Pricing 
Application: PostCom's Proposals (August 2007).
---------------------------------------------------------------------------

    7. What effect do the monopoly laws have on the rates for universal 
services?
    8. In the future (i.e., 3 years, 5 years, 10 years, and 15 years), 
if the monopoly laws are repealed, how should the net costs resulting 
from imposition of the USO on the Postal Service (and perhaps other 
postal operators) be paid for? By a tax on letters delivered to low-
cost delivery areas by all postal operators? \20\ By a tax on all 
letters delivered by all postal operators? By a tax on other postal 
products? By public funds appropriated by Congress?
---------------------------------------------------------------------------

    \20\ Such a tax would seemingly mimic the economic effect of the 
postal monopoly.
---------------------------------------------------------------------------

H. Topic No. 8--Universal Service: Quality of Service

    Specific questions regarding quality of service which appear to be 
relevant to the present study and which commenters may wish to address 
(either in terms of their own experience or in terms of their views 
regarding the needs of others) with respect to the quality of service 
of universal services include, but are not limited to, the following:
    1. How should the quality of service be measured for universal 
service?
    2. Is security of the mail, such as ``sealed against inspection for 
First-Class Mail,'' a part of universal service quality?
    3. Should the USO include quality of service requirements for 
universal services established by the Commission? For which products?
    4. Should the USO require monitoring of the performance of the 
universal services by the Commission? For which products?
    5. Do types of mail delivery service (e.g., curb box, door slot, or 
corner cluster box) present universal service quality issues?

I. Topic No. 9--Methods of Calculating the Cost of the Universal 
Service Obligation and Postal Monopoly

    Specific questions which appear to be relevant to the present study 
and which commenters may wish to address (either in terms of their own 
experience or in terms of their views regarding the needs of others) 
include, but are not limited to, the following:
    1. What mathematical methodologies exist for calculating the net 
cost of the USO? Which methodology is to be preferred? Why?
    2. What have been the most significant efforts to calculate the net 
cost of the USO in the U.S. and abroad? What were the results?
    3. What is the current net cost, if any, of the USO in the United 
States? Under what assumptions?
    4. How can the net benefit of the postal monopoly and mailbox 
monopoly be calculated?
    5. What is the net benefit to the Postal Service, if any, of the 
postal monopoly and mailbox monopoly in the United States? Under what 
assumptions?
    6. To what extent do net benefits from the postal monopoly and/or 
the mailbox monopoly (if any) cover the net costs resulting from the 
USO (if any)? How? Precisely who benefits and who is disadvantaged by 
such a transfer of funds?
    7. To the extent that there is a net cost resulting from the USO 
what funding mechanisms exist to cover this cost? What are the pros and 
cons of each?

J. Topic No. 10--The Implications of the Universal Service Obligation 
for the Postal and Mailbox Monopolies

    Specific questions which address the possible implications of the 
USO for the postal and mailbox monopolies include, but are not limited 
to, the following:
    1. What is the authority of the Postal Service to adopt regulations 
to further define or affect the scope of the USO?
    2. What is the authority of the Commission to adopt regulations to 
further define or affect the scope of the USO?
    3. What is the authority of the Postal Service to adopt regulations 
to further define the scope of the postal monopoly and mailbox 
monopoly? \21\
---------------------------------------------------------------------------

    \21\ See Federal Trade Commission, Accounting for Laws That 
Apply Differently to the United States Postal Service and Its 
Private Competitors (2007) at 16 (``The PAEA also repealed the 
statutory authority for the USPS to issue regulations to define the 
scope of its monopoly.'').
---------------------------------------------------------------------------

    4. What is the authority of the Commission to adopt regulations to 
further define the scope of the postal monopoly and mailbox monopoly?
    5. Would changes in the universal service obligation require 
changes in the postal monopoly or the mailbox monopoly? If so, how and 
why?

K. Topic No. 11--Universal Service, the Universal Service Obligation, 
and the Postal Monopoly in Other Countries

    The effect of postal reform laws on the USO and postal monopoly 
laws in other industrialized countries may provide valuable insights 
into the potential implications of changes in the USO and postal 
monopoly laws in the United States. Commenters may wish to provide 
views and analyses of the evolution of universal service, the USO, and 
the postal monopoly in other industrialized countries and to comment 
upon the possible relevance, or lack of relevance, of such examples for 
the current study.

L. Topic No. 12--Other Issues

    Commenters may also desire to provide any views and analyses on 
subjects not covered by any of the preceding topic headings:
    1. What will be the most important factors influencing the demand 
for universal services over the next 3, 5, 10, or 15 years?
    2. What effects will it have on the demand for universal services 
over the next 3, 5, 10, or 15 years?
    3. What effect will environmental issues have on demand over the 
next 3, 5, 10, or 15 years?
    4. To what extent will new technologies increase or alter the 
demand for universal service by changing the nature of postal services?
    5. What factors affect the decision to use alternative means of 
communications, either electronic (e.g., Internet for bill presentment, 
bill payment, and advertising) or physical (e.g., newspapers, 
alternative delivery services for advertising, private express 
companies)?
    6. In particular, what would be the effect on demand of changes in 
the rates of universal services relative to changes in the Consumer 
Price Index? Consider large changes as well as small and price 
reductions as well as price increases.
    7. What is the importance of universal postal service relative to 
the universal telephone system? Universal Internet service? Private 
delivery services? Newspaper advertising? Other media?

[[Page 23516]]

    8. What broader social, economic, and technological trends may 
affect the future needs and expectations of society generally with 
respect to universal service over the next 3 years, 5 years, 10 years, 
and 15 years?

VII. Ordering Paragraphs

    It is ordered:
    1. As set forth in the body of this notice, Docket No. PI2008-3 is 
established for the purpose of receiving comments regarding universal 
postal service and the postal monopoly.
    2. Interested persons may submit comments no later than June 30, 
2008.
    3. Reply comments also may be filed no later than July 29, 2008.
    4. Emmett Rand Costich is designated as the Public Representative 
representing the interests of the general public in this proceeding.
    5. The Secretary shall cause this notice to be published in the 
Federal Register.

    By the Commission.
Garry J. Sikora,
Acting Secretary.
 [FR Doc. E8-9464 Filed 4-29-08; 8:45 am]
BILLING CODE 7710-FW-P