[Federal Register Volume 73, Number 172 (Thursday, September 4, 2008)]
[Rules and Regulations]
[Pages 51714-51715]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20442]



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Part III





Postal Regulatory Commission





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39 CFR Part 3020



Administrative Practice and Procedure; Postal Service; Final Rule

  Federal Register / Vol. 73, No. 172 / Thursday, September 4, 2008 / 
Rules and Regulations  

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POSTAL REGULATORY COMMISSION

39 CFR Part 3020

[Docket Nos. CP2008-11, CP2008-12, CP2008-13; Order No. 103]


Administrative Practice and Procedure; Postal Service

AGENCY: Postal Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Commission is adding several recently-negotiated Global 
Express Package Service contracts to the competitive product list. This 
action is consistent with changes in a recent law governing postal 
operations. Re-publication of the lists of market dominant and 
competitive products is also consistent with new requirements in the 
law.

DATES: Effective September 4, 2008.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6820 or [email protected].

SUPPLEMENTARY INFORMATION:

Regulatory History

73 FR 43344, July 24, 2008

    On August 5, 2008, the Postal Service filed three identical 
notices, which have been assigned to Docket Nos. CP2008-11, CP2008-12, 
and CP2008-13, announcing prices and classification changes for 
competitive products not of general applicability.\1\ These notices 
announce individual negotiated service agreements, namely, specific 
Global Express Package Service (GEPS) contracts the Postal Service has 
entered into with individual mailers. The Postal Service believes each 
is functionally equivalent to the Global Express Package Services 1 
(GEPS 1) product established in Docket No. CP2008-5. These dockets have 
been filed pursuant to 39 U.S.C. 3633, 39 CFR 3015.5 and Order No. 
86.\2\ In Order No. 86, the Commission found that additional contracts 
may be included as part of the GEPS 1 product if they meet the 
requirements of 39 U.S.C. 3633 and if they are substantially equivalent 
to the initial GEPS 1 contract.\3\
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    \1\ Notice of United States Postal Service of Filing of 
Functionally Equivalent Global Expedited Package Services 1 
Negotiated Service Agreements, August 5, 2008, filed in Docket Nos. 
CP2008-11, CP2008-12, and CP2008-13 (Notices).
    \2\ Docket No. CP2008-5, Order Concerning Global Expedited 
Package Services Contracts, July 23, 2008 (Order No. 86).
    \3\ Order No. 86 at 7.
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    In support of each of these dockets, the Postal Service also filed 
the contract and supporting materials under seal. The Governor's 
Decision supporting the GEPS 1 product was filed in consolidated Docket 
No. CP2008-5.\4\ The Notices also contain the Postal Service's 
arguments that these agreements are substantially equivalent and that 
they exhibit similar cost and market characteristics to the GEPS 1 
product. Notices at 3-5.
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    \4\ Docket No. CP2008-5, United States Postal Service Notice of 
Filing Redacted Copy of Governors' Decision No. 08-7, July 23, 2008.
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    In Order No. 95, the Commission gave notice of the three dockets, 
requested the Postal Service to address certain issues, appointed a 
Public Representative, and provided the public with an opportunity to 
comment.\5\
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    \5\ PRC Order No. 95, Notice and Order Concerning Filing of 
Additional Global Expedited Package Services 1 Negotiated Service 
Agreements, August 11, 2008 (Order No. 95).
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I. Postal Service Supplemental Filing

    In response to Order No. 95, the Postal Service filed redacted 
versions of the certifications related to the contracts filed in Docket 
Nos. CP2008-11, CP2008-12, and CP2008-13.\6\ These versions redact the 
names of the contracting parties, the listed percentages, and 
commercial information relating to pricing factors that the Postal 
Service believes should not be publicly disclosed. Id.
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    \6\ Docket No. CP2008-11, United States Postal Service Response 
to Notice and Order Concerning Global Expedited Package Services 1 
Negotiated Service Agreements and Notice of Filing of Redacted Copy 
of Certifications, August 13, 2008; Docket No. CP2008-12, United 
States Postal Service Response to Notice and Order Concerning Global 
Expedited Package Services 1 Negotiated Service Agreements and 
Notice of Filing of Redacted Copy of Certifications, August 13, 
2008; Docket No. CP2008-13, United States Postal Service Response to 
Notice and Order Concerning Global Expedited Package Services 1 
Negotiated Service Agreements and Notice of Filing of Redacted Copy 
of Certifications, August 13, 2008.
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 II. Comments

    Comments were filed by the Public Representative.\7\ The Public 
Representative's comments focus on four areas: (1) Cost coverage; (2) 
appropriate classification; (3) increased access to U.S. goods by 
consumers; and (4) transparency and disclosure. The Public 
Representative asserts that the three contracts at issue in this 
proceeding satisfy the requirements of Commission rule 3015.5 and 39 
U.S.C. 3633 regarding cost coverage, the lack of cross-subsidization, 
and contribution to institutional costs. Comments of Public 
Representative at 3. The Public Representative also believes that the 
contracts are substantially similar and any differences between them 
and the original GEPS 1 contract are immaterial. Id. at 4. Accordingly, 
the Public Representative contends that these contracts should be 
included as part of the GEPS 1 product category.
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    \7\ Public Representative Comments in Response to United States 
Postal Service Notice of Global Expedited Package Services Contract, 
August 19, 2008 (Comments of Public Representative).
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    The remainder of the Public Representative's comments focus on the 
benefits of the contracts to U.S. consumers and the progress being made 
toward ensuring that only appropriately confidential information is 
submitted to the Commission under seal. Id. at 5-8.

III. Commission Analysis

    The Postal Service proposes to add additional contracts under the 
GEPS 1 product that was created by Docket No. CP2008-5. In Order No. 
86, the Commission noted that:

    If the Postal Service determines that it has entered into an 
agreement substantially equivalent to GEPS 1 with another mailer, it 
may file such a contract under rule 3015.5. In each case, the 
individual contract must be filed with the Commission, and each 
contract must meet the requirements of 39 U.S.C. 3633. The Postal 
Service shall identify all significant differences between the new 
contract and the pre-existing product group, GEPS 1. Such 
differences would include terms and conditions that impose new 
obligations or new requirements on any party to the contract. The 
Commission will verify whether or not any subsequent contract is in 
fact substantially equivalent. Contracts not having substantially 
the same terms and conditions as the GEPS 1 contract must be filed 
under 39 CFR part 3020, subpart B.

Order No. 86 at 7. First, the Commission reviews the contracts to 
ensure that they are substantially equivalent to the pre-existing 
contract classified as part of the GEPS 1 product and thus belong as 
part of that product category. Second, the Commission must ensure that 
the contracts at issue in this proceeding independently satisfy the 
requirements of rule 3015.5 and 39 U.S.C. 3633.
    Here, the Postal Service has filed three additional contracts 
(Docket Nos. CP2008-11, CP2008-12, and CP2008-13) that it believes are 
substantially similar to the one submitted in Docket No. CP2008-5, and 
accordingly should be grouped under the GEPS 1 product. Notices at 3-5. 
It argues these contracts share the same cost and market 
characteristics as the previously classified GEPS 1 contract, in 
particular, those of small or medium-sized businesses that mail their 
products directly to foreign destinations using either Express Mail 
International, Priority Mail International, or both. Id. at 4.
    The Postal Service also identifies differences between proposed new 
contracts and the pre-existing product group, GEPS 1. Id. at 4-5. In 
particular,

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it notes the following differences: (1) Price differences depending on 
volume or postage commitments; (2) price differences due to updated 
costing information; (3) a link between the regulatory review process 
and the expiration date of the agreement; and (4) liquidated damages 
provisions based on individual negotiations and needs.
    The Commission has reviewed the contracts in Dockets No. CP2008-11, 
CP2008-12, and CP2008-13 and finds those agreements to be substantially 
equivalent in all pertinent respects to the GEPS 1 product.\8\
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    \8\ The differences between the contracts and the originally 
classified GEPS 1 contract do not appear to be substantial. However, 
this finding does not preclude the Commission from revisiting this 
issue at a future date if circumstances warrant.
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    Additionally, the Commission reviews the filings to ensure that 
they meet the requirements of rule 3015.5 and 39 U.S.C. 3633. The 
Commission has reviewed the financial analysis provided under seal that 
accompanies the agreements in all three dockets as well as the comments 
filed by interested persons. Based on the information provided, the 
Commission finds that all three proposed contracts submitted should 
cover their attributable costs (39 U.S.C. 3633(a)(2)), should not lead 
to the subsidization of competitive products by market dominant 
products (39 U.S.C. 3633(a)(1)), and should have a positive effect on 
competitive products' contribution to institutional costs (39 U.S.C. 
3633(a)(3)). Thus, a preliminary review of the proposed contracts 
indicates that they comport with the provisions applicable to rates for 
competitive products.
    The revisions to the competitive product list are shown below the 
signature of this Order, and shall become effective upon publication in 
the Federal Register.

IV. Ordering Paragraphs

    It is Ordered:
    1. The contracts filed in Dockets Nos. CP2008-11, CP2008-12, and 
CP2008-13 are added to the product category Global Express Package 
Services 1 (CP2008-5).
    2. The Secretary shall arrange for publication of this Order in the 
Federal Register.

List of Subjects in 39 CFR Part 3020

    Administrative practice and procedure, Postal Service.

    By the Commission.
Judith M. Grady,
Acting Secretary.

0
For the reasons stated in the preamble, under the authority at 39 
U.S.C. 503, the Postal Regulatory Commission amends 39 CFR part 3020 as 
follows:

PART 3020--PRODUCT LISTS

0
1. The authority citation for part 3020 continues to read as follows:

    Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.


0
2. Revise Parts A and B of Appendix A to Subpart A of Part 3020--Mail 
Classification Schedule to read as follows:

Appendix A to Subpart A of Part 3020--Mail Classification Schedule

                    Part A--Market Dominant Products
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                    1000 Market Dominant Product List
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                            First-Class Mail
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Single-Piece Letters/Postcards.
Bulk Letters/Postcards.
Flats.
Parcels.
Outbound Single-Piece First-Class Mail International.
Inbound Single-Piece First-Class Mail International.
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                  Standard Mail (Regular and Nonprofit)
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High Density and Saturation Letters.
High Density and Saturation Flats/Parcels.
Carrier Route.
Letters.
Flats.
Not Flat-Machinables (NFMs)/Parcels.
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                               Periodicals
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Within County Periodicals.
Outside County Periodicals.
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                            Package Services
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Single-Piece Parcel Post.
Inbound Surface Parcel Post (at UPU rates).
Bound Printed Matter Flats.
Bound Printed Matter Parcels.
Media Mail/Library Mail.
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                            Special Services
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Ancillary Services.
International Ancillary Services.
Address List Services.
Caller Service.
Change-of-Address Credit Card Authentication.
Confirm.
International Reply Coupon Service.
International Business Reply Mail Service.
Money Orders.
Post Office Box Service.
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                      Negotiated Service Agreements
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HSBC North America Holdings Inc. Negotiated Service Agreement.
Bookspan Negotiated Service Agreement.
Bank of America Corporation Negotiated Service Agreement.
The Bradford Group Negotiated Service Agreement.
1001 Market Dominant Product Descriptions.
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                      Part B--Competitive Products
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                      2000 Competitive Product List
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                              Express Mail
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Express Mail.
Outbound International Expedited Services.
Inbound International Expedited Services
    Inbound International Expedited Services 1 (CP2008-7).
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                              Priority Mail
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Priority Mail.
Outbound Priority Mail International.
Inbound Air Parcel Post.
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                              Parcel Select
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                          Parcel Return Service
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                              International
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International Priority Airlift (IPA).
International Surface Airlift (ISAL).
International Direct Sacks--M-Bags.
Global Customized Shipping Services.
Inbound Surface Parcel Post (at non-UPU rates).
International Money Transfer Service.
International Ancillary Services.
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                            Special Services
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Premium Forwarding Service.
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                      Negotiated Service Agreements
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Domestic
    Express Mail Contract 1 (MC2008-5).
Outbound International
    Global Expedited Package Services (GEPS) Contracts
        GEPS 1 (CP2008-5, CP2008-11, CP2008-12, and CP2008-13).
    Global Plus Contracts
        Global Plus 1 (CP2008-9 and CP2008-10).
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[FR Doc. E8-20442 Filed 9-3-08; 8:45 am]
BILLING CODE 7710-FW-P